Lemonade Auto Insurance Review: What This New Car Insurance Promises and Delivers
Lemonade just launched Lemonade Car, their newest car insurance product, in November 2021. Starting at just $30 per month, drivers can secure the necessary coverages with add-on options, like extended glass and roadside assistance. Lemonade Car is available only in Illinois but will hit the road in different states soon.
With a low starting rate and service centered around its intuitive mobile app, Lemonade is driving excitement to its newest product. In this Lemonade auto insurance review, we'll cover:
Lemonade Auto Insurance Overview
|Pricing||Starting at $30/mo|
Our Thoughts On Lemonade Auto Insurance
Founded in 2015, Lemonade takes a refreshing departure from traditional insurance companies with their digital and mobile app approach. Now that Lemonade Car is finally available in November 2021 in Illinois, we'll break down what we enjoy and what we're not so fond of.
What We Like
Lemonade makes insurance easy and affordable. Following their slogan, "Insurance built for the 21st century," Lemonade insurance is quick and no-fuss — consumers can obtain a quote and resolve claims within minutes using Lemonade's mobile app.
Consumers have praised Lemonade for their affordable home, renters, pet and term-life policies. With a rate starting at $30 per month, Lemonade is now helping drivers stay covered without breaking the bank.
Lemonade values philanthropy and environmental consciousness. Lemonade's profit model is unique — you're charged a flat fee and excess premiums are donated to various charities, including American Forests, the Malala Fund, CURE Childhood Cancer, Teach for America and more.
Lemonade is also a B Corp, a certification that requires for-profit companies to meet certain social and environmental standards. To incentivize lower CO2 emissions, Lemonade plants trees based on your mileage and provides discounts for driving an electric vehicle or hybrid car.
What We Don't Like
Lemonade Car is available in just one state (so far). Available only in Illinois, Lemonade Car isn't accessible to most U.S. drivers.
Since the following states currently enjoy all of Lemonade's products, we predict Lemonade Car will cruise to these locations next: Arizona, California, Colorado, Connecticut, District of Columbia, Maryland, Michigan, Missouri, Nevada, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, and Wisconsin.
We have some concerns about telematics. Many auto insurance companies are using telematics (location-based tech) to optimize insurance premiums. Lemonade's telematics technology collects information about your driving behavior, including:
How smoothly you brake
Whether you're going 50 mph in a 30 mph area
If you're texting or calling while driving
If the phone is sitting in your pocket, on a dashboard mount, or the seat next to you
The smoothness of your turns
The qualm we have is that the Lemonade Car app must be on 24/7 — even when you're not driving. Beyond the battery drain, it doesn't sit right knowing a car insurance provider is collecting information even when you're not behind the wheel. With full transparency, Lemonade discloses that this product is not for you if you're uncomfortable with telematics requirements.
Lemonade Car Insurance Coverage Options
Type of Coverage
What It Does
Bodily injury liability
Covers the medical expenses of somebody you accidentally injure who is not a passenger in your car.
Property damage liability
Covers the cost to repair or replace another person's car or personal property.
Pays for repairs or replacements to your cars for incidents outside of a car accident (e.g., fire, theft, vandalization, weather, animal collision).
Pays to repair or replace your car if it's damaged after striking another vehicle or object, even if you are at fault for the collision.
Medical payments coverage (MedPay)/Personal injury protection (PIP)
Covers medical expenses if you or a passenger in your car become injured in an accident. Covered expenses can include ambulance fees, x-rays, surgeries, nursing care and funeral services.
Pays for medical bills, lost wages, and costs of repairs due to an injury caused by an uninsured driver.
Covers the remaining cost of medical bills, lost wages and repairs when the other party in an accident is financially liable but their coverage is insufficient.
Covers the cost of a rental car, rideshare service or public transportation up to a daily limit for a month while your car is undergoing repairs.
Pays for the cost to repair or replace your car's damaged windshield.
Includes lockout services, flat tire replacement, jumpstarts, fuel delivery and emergency charging for electric vehicles.
What Lemonade Does NOT Cover
Lemonade covers a lot but their extensive coverage is not all-encompassing. As with many other insurers, some scenarios not covered under a Lemonade auto insurance policy include:
Natural wear and tear to your car
Accidents while using your car for a rideshare service or business use
Freezing/ice damage (e.g., battery dies from low temperatures)
Damage to custom parts valued over $1,000
Personal belongings inside your car
Routine maintenance (e.g., oil changes, rotating your tires)
Gap coverage (but Lemonade stated this may change in the future)
Auto Insurance Rates
Lemonade Lowest Monthly Premium
Average Monthly Premium (Small Carriers)
Average Monthly Premium (National Carriers)
Monthly premiums start at $30 per month. While the above chart compares lemons and limes (lowest vs. average), $30 is an affordable baseline. Lemonade lists the following as factors that can affect your insurance premium:
Deductible: Deductibles generally range between $250 and $2,000. Higher deductibles typically mean lower monthly premiums (but you'd have a higher upfront cost for covered claims).
Car model: Drivers of electric or hybrid cars enjoy a discount.
Car age: Newer car models tend to have lower premiums.
Driving history: Drivers with a colorful history of accidents and traffic violations can expect higher premiums.
Driving behavior: Lemonade's location-based technology adjusts your premium based on your driving quality.
Mileage: Lemonade will adjust your monthly premium based on how much you drive (more driving=increased chances of an accident).
Coverage: Increasing your coverage plugs up those holes in your protection, but also means higher monthly premiums.
Coverage limits: Higher limits means the insurer pays more in a covered claim. Insurers often charge higher premiums to offset this increased risk.
Household: Your first premium will reflect the driving records and insurance histories of your entire household, even if you're the only policyholder. Your premium should go down after the telematics technology determines you're a safe driver.
Bundle: Opening a multi-policy with Lemonade's other insurance products earns you a discount (more on that below).
Eco-Friendly Cars and Hybrid Drivers
Electric/hybrid vehicle drivers enjoy a special discount, free emergency charging and extra coverage against damage to your wall charger. This is part of Lemonade's efforts to reduce carbon dioxide by incentivizing the driving of eco-friendlier vehicles.
Bundling your auto insurance with another Lemonade policy — homeowners, renters, pet or life insurance — will net you a 10% discount. Bundling discounts are automatic with no need to speak with a live agent. Lemonade even notes that the bundle discount can potentially cover the cost of Lemonade's renters policy.
Here's a quick summary of Lemonade's insurance rating and product features:
Lemonade Products Overview
*Ratings collected from ConsumerAffairs.com
How to Sign Up for Lemonade Car
If you're already insured with another provider, you can switch using the Lemonade app, which will guide you through a series of steps and questions that take a few minutes. If you just purchased a new car and already have a Lemonade Car policy, you can add your car through the mobile app or the website and enjoy same-day coverage.
Once you're registered, Lemonade makes it easy to edit your coverage and adjust your limits and deductibles through the mobile app or on the site.
Pros and Cons of Lemonade Auto Insurance
Fast claims process
Philanthropic and environmentally conscious
Telematics technology can be concerning
Intuitive mobile app
Pricing on new customers is determined by the entire household
Fast claims process: Nearly 30% of claims are handled instantly with payments issued in seconds. Claims that require a more discerning eye are escalated to a team of professionals for quick handling.
Philanthropic and environmentally conscious: Lemonade's excess premiums have been donated to various charities, such as American Forests, the Malala Fund, CURE Childhood Cancer, Teach for America, and more. Lemonade also plants trees based on your mileage and provides discounts for driving an electric vehicle or hybrid car to reward lower CO2 emissions.
Intuitive mobile app: Nearly everything about Lemonade Car is done through the mobile app — from changing over from another insurance provider and adding a new car to adjusting your deductible and filing a claim after an accident.
Limited availability: Lemonade auto insurance is available in only one state: Illinois. While we predict Lemonade will expand to other states, this limited availability makes Lemonade simply inaccessible to most U.S. drivers.
Telematics is invasive: Telematics allows fairer pricing based on your driving behaviors, but technology that recognizes when your phone is in your pocket or on the passenger's seat is unsettling. Not to mention it must be active 24/7.
Initial pricing considers the entire household: Your first premium considers your entire household, factoring in their driving records, insurance histories and previous claims, which may raise your rate if you're the safest driver in your house. Lemonade does note that your premium will drop over time if you're driving safely. Still, you may start you out at a higher premium.
Compare Insurance Rates
Your state requires you to have a minimum level of car insurance — there's no driving around this fact. So why not get the best rate for your needs and budget? Lemonade Car is just one option. There are several auto insurance companies out there (especially if you live outside Illinois).
But who wants to go through the tedious process of visiting websites individually, researching quotes, and maybe talking to a live agent on the phone? SmartFinancial offers a speedier method with side-by-side comparisons of our 200+ insurance company partners. Just enter your zip code below to grab your free quote today.
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