Lemonade Car Insurance Review: Is It Right for You?

Lemonade Insurance: At a Glance

Lemonade is known for its eco-conscious approach and offers discounts to electric and hybrid vehicle owners. You’ll also pay lower rates if you’re a low-mileage driver or bundle your auto insurance with other Lemonade policies such as home, renters, pet insurance, or term life. And, for extra peace of mind, every Lemonade auto policy includes complimentary roadside assistance.

What’s not to love? Unfortunately, Lemonade is only available in seven states, and it doesn’t offer rideshare insurance or other specialty coverages. Additionally, Lemonade requires all of its policyholders to install its mobile app, which can lead to privacy concerns.

Let’s see what Lemonade car insurance reviews have to say.

Is Lemonade a Good Choice for Car Insurance?

At Lemonade, there’s no middleman. The company is fully licensed and directly manages its policies and claims. Its unique Lemonade Giveback program — which has donated $8.2 million to charities, according to the company’s website — is proof of its commitment to social responsibility.

Premiums start at $30 per month, and you can customize your policy and adjust coverages, limits, and deductibles at any time. But its limited availability will be a drawback for many drivers.

Where Lemonade stands out

With its focus on technology and sustainability, Lemonade appeals to environmentally conscious drivers by offering discounts for eco-friendly vehicles and planting trees to offset carbon footprints.

Where Lemonade falls short

While Lemonade shines in sustainability and technology, it falls short with its limited geographic availability: It currently only serves seven states. Another downside is potential privacy concerns. All policies rely on telematics monitoring, which requires you to install a mobile app or add a plug-in device to your vehicle to get coverage.

What Lemonade Customers Are Saying

Lemonade’s website says it’s “almost” a 5-star company, citing a 4.9-star rating in the App Store. While most reviewers agree and give the company a thumbs up, a few customers have had less favorable experiences.

Let’s take a closer look at what real Lemonade customers have to say about the company.

Trustpilot reviews: 4.3 out of 5

Lemonade car insurance reviews on Trustpilot show a rating of 4.3 out of 5, with 81% of the reviews being five stars. Customers enjoy the company’s clear and straightforward policies, coverage options, and, notably, the prompt response time from an “actual human.”

Still, 14% of Trustpilot reviews are just one star, with many citing rate hikes, a long claims process, and poor response from customer service.

BBB customer reviews: 2.1 out of 5

Lemonade isn’t accredited by the Better Business Bureau (BBB), and its review score stands at a much lower 2.1 out of 5. Common themes from the over 400 complaints filed from 2020 to 2023 are rate increases, poor communication, and challenges in contacting customer representatives.

NAIC complaint index: Below average

Despite the number of BBB complaints, the National Association of Insurance Commissioners’ (NAIC) Complaint Index Report indicates Lemonade has a good record. A complaint index of 0, which is below average, suggests overall customer dissatisfaction might not be as high when considering the broader industry context.

What Types of Auto Insurance Coverage Does Lemonade Offer?

During the quote process, I found a range of auto insurance coverages available. Lemonade let me tailor my quote with different policy types and deductible options from $250 to $2,000. Here’s a breakdown of the types of coverages you’ll find:

• Liability coverage: Pays for injury and property damage expenses to others in an accident you cause.
• Collision coverage: Covers damage to your car from a collision, regardless of who’s at fault.
• Comprehensive coverage: Protects against non-collision incidents like theft, vandalism, or natural disasters.
• Medical payments coverage (MedPay): Pays for medical expenses for you and your passengers after an accident, regardless of fault.
• Personal injury protection (PIP): Covers medical expenses, lost wages, and other damages, regardless of fault.
• Uninsured/underinsured motorist: Protects you if you’re in an accident with a driver who has insufficient or no insurance coverage.
• Temporary transportation: Pays for rental cars or alternative transportation for up to a month while your vehicle is being repaired.
• Extended glass coverage: Covers auto glass repairs with little or no deductible.
• Roadside assistance: Offers help for breakdowns, flat tires, or other roadside emergencies. Included free in every Lemonade auto policy.

Lemonade Car Insurance Discounts

Lemonade offers several discounts to make car insurance more affordable and to reward responsible driving behavior. Here’s how Lemonade can save you money:

• Hybrid/EV discount: Owners of hybrid or electric vehicles can get a discount, promoting eco-friendly driving.
• Bundle discount: Savings are available when combining Lemonade’s car, homeowners, pet health, term life, or renters insurance policies.
• Planning ahead: Sign up for a policy before the start date to receive a discount.
• Mobile app: Allow location services in the Lemonade app to unlock savings on your policy.
• Safe driver: Lemonade collects driving and location data when you’re behind the wheel and rewards safe driving habits with a discount.

Purchasing a Car Insurance Policy from Lemonade

When requesting a quote from Lemonade, I found the process largely straightforward and quick. It took about eight minutes from start to finish, and I could buy and activate coverage entirely online. The only hiccup in my experience was because I didn’t have my driver’s license number and VIN on hand.

To start, I chose car insurance only, although I could add renters, homeowners, and pet health insurance. I entered my basic information, like my name, address, email, and date of birth.

Before going any further, I had to agree to install and run Lemonade’s mobile app on every driver’s phone. The platform suggested cars to add to my policy, probably based on my address.

You can add other drivers at this point, as well. I only needed coverage for myself, so I didn’t add anyone else.

The next few questions were about my vehicle. Lemonade asked for the VIN, car usage, annual mileage, and whether it was financed or leased. I also entered information about my driving history, including a speeding ticket from a few years ago.

Next, I received my quote. Lemonade let me choose the policy start date and payment options. I could make monthly payments, but paying the policy in full knocked 15.5% off the price.

I also had the option to customize my coverage, including adding full coverage and selecting a deductible amount I was comfortable with.

How much does Lemonade car insurance cost?

Lemonade didn’t start offering auto coverage until 2021. As a new company, finding rates can be challenging. The company’s website indicates rates start at $30 per month.

In my experience, my monthly quote for full coverage with a $1,000 deductible was $108.67. That said, it’s important to remember that these rates are specific to my individual driver profile. The quote you get from Lemonade could be drastically different.

Reviewing Lemonade’s Customer Service

When it comes to Lemonade’s customer service, you have a few ways to get help. You can email questions right from the quote page, but you won’t get an immediate reply. Calling the company’s main number lets you talk to someone much faster.

I called on a Saturday morning, found their phone menu easy to use, and got through to a real person in less than three minutes.

Since car insurance is new for Lemonade, the company has few online reviews. The ones I found mentioned that Lemonade paid body shops quickly after an accident, within about two weeks. Still, they also pointed out some minor problems, like difficulties in contacting customer service and getting quoted higher rates than expected.

Filing a Claim with Lemonade

Lemonade advertises a tech-driven approach to filing claims, mainly through its mobile app with “AI Jim,” a chatbot guiding users. Policyholders can also file a claim by calling Lemonade’s customer service phone number at 1-844-733-8666 and selecting option 1.

Reviews for car insurance claims aren’t easy to find since the company is still new. Most feedback was from pet and renters policies and praised customer support and the quick claims process.

For auto claims, a testimonial on Reddit highlighted that a Lemonade adjuster followed up within a few hours after filing a claim. But the policyholder still had to locate body shops and submit repair estimates themselves — a task other insurers often handle for you. Even so, the reviewer was happy with the process and got their vehicle back on the road within a few weeks.

Lemonade isn’t rated by AM Best, but it holds an “A-Exceptional” financial stability rating from Demotech, a lesser-known competitor that grades insurers on their overall financial standing. This rating indicates a strong financial ability to fulfill claim obligations.

What Other Types of Insurance Does Lemonade Offer?

In addition to auto insurance, Lemonade offers several other insurance products to meet personal and property protection needs, such as:

• Renters insurance: Covers personal property in a rental unit against damage or theft and protects against liability claims for damage you might cause to others.
• Homeowners insurance: This policy covers the home structure, personal belongings, and liability for injuries or damages that occur on the property.
• Pet health insurance: Covers veterinary bills for your pets, including diagnostics, procedures, and medications.
• Term life insurance: Provides a death benefit to beneficiaries if the policyholder passes away during the policy term without requiring a medical exam.

Bottom Line: Is Lemonade Car Insurance Right for You?

Take a look at Lemonade’s pros and cons before deciding if it’s the right fit for you. Lemonade might align well with your values if you’re an eco-conscious driver who values social responsibility and a tech-forward approach. But it may not be the best choice if you’re looking for a traditional insurance model or specific coverage like ride-share insurance.

Lemonade Auto Insurance FAQs

Lemonade is a newcomer to the car insurance market, which can lead to many questions. Here are answers to some of the most common questions people have about Lemonade car insurance.

Why is Lemonade car insurance so cheap?

Lemonade’s low rates are primarily due to its use of AI and technology. This combination streamlines operations and risk assessment, which can reduce administrative costs.

Plus, it sells policies directly to drivers, so there’s no middleman.

Is Lemonade a trustworthy insurance company?

Yes. Lemonade is a legitimate and trustworthy company. It’s fully licensed and regulated, with a financial stability rating of A-Exceptional from Demotech.

Still, experiences can vary, so reviewing customer feedback is important before buying a policy from Lemonade.

Is Lemonade better than other insurance companies?

The best insurance company depends on your unique needs and preferences. Lemonade offers a unique approach with its use of AI and commitment to social responsibility. But it may not suit everyone, especially considering coverage is currently available in just seven states.

Is Lemonade insurance owned by GEICO?

No. Lemonade Insurance isn’t owned by GEICO. Lemonade is an independent, publicly traded company and operates separately from traditional insurance companies like GEICO.

Methodology

Data scientists at Compare.com analyzed more than 50 million real-time auto insurance rates from more than 75 partner insurance providers in order to compile the quotes and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information. All the quotes listed in this article have been gathered from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide drivers with insight into how auto insurance companies determine their premiums.

Sources

1. United States Securities and Exchange Commission, “Form S-1 Registration Statement,” Accessed January 27, 2024.
2. Trustpilot, “Lemonade,” Accessed January 27, 2024.
3. Better Business Bureau, “Lemonade Insurance Company,” Accessed January 27, 2024.
4. National Association of Insurance Commissioners, “Complaint Index Report,” Accessed January 27, 2024.
5. Reddit, “r/Insurance,” Accessed January 27, 2024.