Lemonade Homeowners Insurance Review

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Lemonade

Best Home Insurance Company of 2022

AM best rating
N/A
Online Tools
Online Estimate
Multi Policy Discount Available

Lemonade offers a variety of policy types, including home insurance, renters insurance, term life insurance policies, as well as pet insurance and auto coverage. Founded in 2015, Lemonade is unique among the companies in our rating for being entirely online from checking quotes to filing claims. Lemonade is incorporated as a public benefit corporation, and its Giveback program lets customers designate a charity where their excess premiums will go after the company takes a fixed percentage of premiums and uses the rest to pay claims.

Popular Home Insurance Companies

Pros:

  • Policies managed primarily online or through the mobile app

  • Has several add-ons to customize policy

  • Lemonade’s Giveback program donates excess premiums annually to a charity chosen by policyholders

Cons:

  • No local agents available for in-person service

  • Only offered in 23 states and Washington, D.C.

  • More expensive compared to other companies in our rating

As the No. 1 company in our Best Homeowners Insurance Companies of 2022 rating, Lemonade is non-traditional in its structure. The company primarily conducts business online, from requesting a quote and purchasing a policy to filing and tracking claims and paying bills. It requires its policyholders to download its mobile app to manage their policies, report claims, and contact the company. While this may be a benefit for some, it may also be a negative for those seeking an agent to manage their insurance and provide advice. Lemonade’s home insurance product is only available in 23 states and Washington, D.C.

Lemonade offers a standard homeowners insurance policy that covers the home itself, detached structures on the premises, personal belongings, additional living expenses (ALE), lawsuit protection, and guest medical payments. Lemonade has additional coverage options for water backup, equipment breakdown, buried utilities (typically called service line coverage), and extra coverage for valuable items like jewelry, artwork, cameras, and musical instruments.

The sample homeowners policy we reviewed had a monthly premium of $178.25, which is fractionally less than the most expensive company, Allstate, at $181.00. Despite its favorable rating in our analysis, the company has the second-highest premium amongst those we analyzed and is not rated for financial strength by AM Best.

Lemonade also created a Giveback program to donate excess premiums at the end of each year to various charities, which are chosen directly by policyholders.

Lemonade offers the typical six coverages in its standard home insurance policies:

  • Dwelling Coverage: This pays to repair or rebuild your home’s structure when damaged in a covered claim. 
  • Other Structures: This covers detached structures on your property, such as pole barns, detached garages, and fences that are damaged and need to be repaired or rebuilt. 
  • Personal Property: This provides replacement of and/or reimbursement for your furniture, clothes, appliances, electronics, and other belongings. 
  • Loss of Use: This is coverage for staying in a hotel or eating out when your home is uninhabitable after a covered peril occurs. It is also called additional living expenses (ALE). 
  • Liability Coverage: Liability provides coverage in the case of bodily injury or property damage to other people (or their personal belongings) as a result of your actions. The loss can occur on or off your property.  
  • Medical Payments: This pays for medical bills generated from guest injuries that occur on your property. 

Available

Available in:

  • Arizona
  • California
  • Colorado
  • Connecticut
  • Georgia
  • Illinois
  • Indiana
  • Maryland
  • Massachusetts
  • Michigan
  • Missouri
  • Nevada
  • New Jersey
  • New York
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Tennessee
  • Texas
  • Virginia
  • Wisconsin

  • Arizona
  • California
  • Colorado
  • Connecticut
  • Georgia
  • Illinois
  • Indiana
  • Maryland
  • Massachusetts
  • Michigan
  • Missouri
  • Nevada
  • New Jersey
  • New York
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Tennessee
  • Texas
  • Virginia
  • Wisconsin
See all

For a 2,500-square-foot townhouse in Naperville, Illinois with a dwelling coverage of $450,000, Lemonade’s sample premium is $178.25 per month. This is one of the highest premiums in our rating, second only to Allstate’s monthly cost of $181.00. Your specific premium will vary based on your home’s specs (such as construction type, materials, and age) and factors including prior claims history, credit score, and ZIP code.

When compared to the other insurers in our rating, Lemonade offers fewer discounts on its homeowners insurance policies. The company highlights the following:

  • Bundling: You will qualify for this discount if you purchase another Lemonade policy, like auto or pet insurance. 
  • Protective Devices: Having smoke alarms, burglar alarms, or deadbolts will make you eligible for this discount. 
  • Annual Payment Plan: You will receive a discount for paying your premium in full each year. 

Additional discounts, such as claim-free, new home, renovated home, and loyalty, may be available in your state, so contact Lemonade directly for more information.

Lemonade offers several additional coverages on its home insurance policies, some which are common amongst insurers and some that are not. These include:

  • Water Backup: This provides coverage for damages resulting from backed up pipes, sump pumps, or floor drains. The source of the backup is not covered itself, but damage to your home’s structure, like the floors or walls, and your belongings is covered up to $5,000 or $10,000. 
  • Foundation Water Backup: This covers cracking, seeping, or leaking foundations caused by water collection, which is typically excluded in a standard homeowners insurance policy.  
  • Buried Utility: This coverage, which is normally called service line coverage, pays up to $10,000 to repair or replace underground lines that run from the street to your property. This includes water, sewage, gas, electrical, and power lines and covers perils such as breakdowns, wear and tear, freezing, artificial currents, and excess weight. 
  • Equipment Breakdown: This broadens the covered perils for your appliances and electronics to include mechanical breakdown and electrical power surges, and covers up to $100,000 in damages. 
  • Extra Coverage: This is Lemonade’s endorsement for valuables like jewelry, musical instruments, artwork, cameras, and bicycles. These items typically have limited coverage under a standard home insurance policy, so this additional coverage will help with accidental damages and losses, cover the appraised values, and does not require a deductible. 
  • Extended Reconstruction Cost: This provides an additional 25% or 50% of your dwelling coverage to rebuild your home if the initial coverage amount is insufficient. 
  • Swimming Pool Coverage: This is coverage for injuries resulting from the use of your pool, which are typically excluded in a standard homeowners policy. However, the structure of the pool is usually covered. 

The additional coverages mentioned above are those frequently purchased by Lemonade policyholders. If you have specific items or circumstances you want covered, contact a Lemonade representative for suggestions.

To buy a homeowners insurance policy from Lemonade, you will apply through either the Lemonade website or its mobile app.

Steps to buying Lemonade homeowners insurance:

  1. Before you start the process, think about the amount of coverage you want and how high of a deductible you’re comfortable paying. 
  2. Visit the Lemonade website or download the app from your phone's marketplace. Click or tap the “Check our prices” button to get a quote. Input information about your home’s address, number of rooms, approximate square footage, and age. 
  3. See how the quote you get compares to other insurers you're considering.
  4. If you buy, decide if you want any add-on extra coverage for valuables like art, musical instruments, and jewelry.
  5. Keep the app on your phone to file future claims.

You can file claims with Lemonade through its mobile app. In an emergency situation, you can also start filing and request urgent assistance by calling customer service.

Steps to file a claim:

  1. Open the Lemonade mobile app and tap the "File a Claim" button.
  2. Fill out the form and follow the instructions. Provide your bank deposit information for reimbursement.
  3. Submit additional information, including a video, as requested by Lemonade. Providing receipts for damaged items can make it easier to get your claim processed quickly. 
  4. Receive compensation from Lemonade by direct deposit. Some claims can be paid immediately, while others may require additional review and communication with Lemonade customer service. 

Lemonade says its goal is for simple property claims to be paid almost immediately. However, some property damage claims or liability claims may take longer to settle, especially if this is not the first loss you are reporting or if information is missing. This is why Lemonade may request video footage to review your claim and receipts from items purchased to verify cost and ownership.

To learn more about filing a homeowners insurance claim, check out our guide.

USAA  »

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Caters to Military Families

AM best rating
A++
Online Tools
Online Estimate
Multi Policy Discount Available

Lemonade vs. USAA

USAA is No. 2 in our Best Homeowners Insurance Companies of 2022 rating, just behind Lemonade. USAA is also No. 1 in our Best Home and Auto Insurance Bundles of 2022 rating, in which Lemonade did not make the cut. While Lemonade doesn’t have any membership requirements, USAA is exclusive to past and current members of the military, their spouses, and their children.

Both companies conduct the majority of their business online or through their mobile apps, but USAA also has an online chat, a main phone number, and a few in-person locations in select cities. Lemonade only has an emergency claims phone number and email address. Policyholders can use the online and mobile features to request quotes, file and track claims, and contact the insurers. Lemonade is only available in 23 states plus Washington, D.C., whereas USAA is available nationwide.

Both companies offer standard homeowners insurance policies along with various additional coverage options. Although both offer earthquake coverage, Lemonade only does so in California currently. USAA also offers home sharing coverage for those who rent out a room or their entire home, and uniform coverage for active duty and deployed members. Although discounts for bundling and having protective devices are available with both carriers, not filing a claim in five or more years and installing an impact-resistant roof may qualify you for additional discounts with USAA. USAA receives a financial rating of A++ (Superior) from AM Best, while Lemonade has not been rated.

Learn more in our USAA review.

Erie Insurance  »

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Offers Extensive Bundling Options

AM best rating
A+
Online Tools
Agent only
Multi Policy Discount Available

Lemonade vs. Erie Insurance

Erie Insurance is No. 3 in our Best Homeowners Insurance Companies of 2022, only two steps down from No. 1 Lemonade. While Lemonade offers its insurance products and services solely online and through a mobile app, Erie uses independent insurance agents to obtain quotes, purchase policies, manage coverages, and report claims. In addition to contacting their agent, Erie home insurance policyholders can also utilize online account and mobile app features to contact the company directly, file and track claims, and pay their premiums.

Guaranteed replacement cost is standard with Erie Insurance, but it’s not available in every state or on every policy. Guaranteed replacement cost simply means that your home will be rebuilt even if your dwelling coverage amount is insufficient. However, you are required to report any renovations that exceed $5,000 to ensure your coverage limit is as accurate as possible.

Both carriers offer water backup, service line, and valuable personal property (the latter two are called buried utility and extra coverage, respectively, with Lemonade) as additional home coverage options. Erie also offers identity recovery for fraud and theft, gift card reimbursement when the corresponding business has closed, replacement of legal documents like passports, and coverage for animals, birds, and fish.

Erie is a regional insurer, selling its home insurance products in 12 states, and Lemonade’s are available in 23 states. Both companies are also available in Washington, D.C. Erie has an AM Best financial strength grade of A+ (Superior). Lemonade is not rated.

Learn more in our Erie Insurance review.

What does Lemonade homeowners insurance cover?

Lemonade homeowners insurance covers you if you incur damage to your house or other structures like sheds, lawsuits against you, and injuries to your guests. If your property is stolen anywhere in the world, including outside your home, that's generally covered by Lemonade insurance. Additionally, if your home becomes uninhabitable, living expenses while your property is repaired are covered by Lemonade. Home insurance policies from Lemonade will also provide some coverage for your things stored outside your home, for example if you have items in a storage unit.

To learn more about what your homeowners insurance policy will typically cover, read our guide.

What does Lemonade’s homeowners insurance not cover?

There are several things that aren’t covered by Lemonade’s homeowners insurance, including bed bug infestations. Also, if your power, heat, or water goes out, it typically will not be covered.

Lemonade also doesn’t cover any accidentally lost or damaged personal items.

Does Lemonade’s homeowners insurance cover mold?

Lemonade covers mold when it's caused by something else that's covered, like the water used to put out a fire in the house. Other molds, such as in the bathroom, are not covered.

Does Lemonade’s homeowners insurance cover water damage?

Yes, water damage is covered if it's caused by a sudden accident, like a malfunctioning dishwasher or washing machine or a burst pipe in your home.

Water damage that’s the result of maintenance issues, like long-term leaks from pipes, water backup from a drain or sewer line, and most mold issues, aren't covered. Also not covered is water damage from natural flooding, such as from a storm surge or an overflowing river.

Does Lemonade’s homeowners insurance cover termites?

Termite damage generally isn't covered because treating for termites is considered part of a homeowner’s general maintenance. Sudden catastrophes caused by hidden termite damage may be covered.

Does Lemonade’s homeowners insurance cover theft?

Items stolen anywhere on earth are generally covered by Lemonade insurance. You may want extra insurance for valuables like jewelry. Lost items aren't covered without extra coverage.

Does Lemonade’s homeowners insurance cover roof leaks?

Roof leaks are covered if they're caused by sudden unexpected events, like a tree coming through your roof, but not if they're from long-term deterioration.

Does Lemonade’s homeowners insurance cover tree damage?

A Lemonade homeowners insurance policy includes tree damage caused by a covered event, like a windstorm. It may not be covered if the tree has been deteriorating over time.

Does Lemonade’s homeowners insurance cover dog bites?

Dog bites are normally covered with Lemonade’s homeowners insurance. However, there are certain breeds that are considered high-risk that will not be covered. Also, if your dog has a history of biting, it will not be covered either.

Dog breeds listed as high-risk on Lemonade’s website include:

  • Akitas
  • Alaskan malamutes
  • Chows
  • Doberman pinschers
  • German shepherds
  • Great Danes
  • Pit bulls
  • Presa Canarios
  • Rottweilers
  • Siberian huskies
  • Staffordshire terriers
  • Wolf Hybrids

However, the breed restriction doesn’t apply to those in Connecticut, Georgia, Illinois, Michigan, New Jersey, New York, Pennsylvania, or Virginia. For these states, coverage would only be denied if your dog has a history of biting.

Does Lemonade’s homeowners insurance cover personal liability?

Lemonade generally covers it if someone is injured on your property. You're also generally covered for damage to their possessions if something happens to them on your property and for up to $5,000 of medical bills that your guests sustain from injuries they incur on your premises.

Does Lemonade’s homeowners insurance cover fire?

Lemonade covers you against fire damage to your house, including house fires and damage from wildfires, plus expenses you incur if your house becomes uninhabitable.

Does Lemonade’s homeowners insurance cover insect damage?

Generally, only sudden, unexpected events from hidden insect damage are covered. Insects are usually considered a home maintenance issue. Bed bug infestations are also not covered.

Is home insurance from Lemonade tax deductible?

In general, home insurance premiums from Lemonade or any insurer cannot be deducted from your income taxes, according to the Internal Revenue Service (IRS). You can, however, deduct your mortgage insurance premiums.

How does Lemonade’s Giveback Program work?

Lemonade deducts a fixed amount from the premiums it collects to cover its operating expenses and insurance payouts. The unclaimed funds (up to 40%, according to its website) are in turn donated to nonprofits as part of Lemonade’s Giveback Program. People who buy insurance from Lemonade can participate by choosing from a list of qualified nonprofits. Some past beneficiaries include the American Red Cross, The Trevor Project, and the Malala Fund.

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    U.S. News & World Report (U.S. News) prepared this content about insurance companies for general informational purposes only. Neither U.S. News nor the individual writers of this content are licensed to sell or advise on insurance products. Some coverages, discounts and features may not be available in all states. For more information about any of the companies or products profiled herein, or to inquire about the purchase of insurance, please contact the insurance company, an insurance agent or a financial advisor. This content is not, and should not be considered to be, a recommendation to homeowners insurance products generally or an endorsement of a particular insurer or product. Any rates listed are for illustrative purposes only. You should contact the insurance company or insurance agent directly for applicable quotes.