Lemonade Auto Insurance Review: AI-Powered Insurance That's Fun and Affordable
Review
Updated
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Lemonade is ideal car insurance for drivers with good records who drive infrequently and want a no-frills claims process. Its cheap rates and easy claims process makes it a favorite of tech-savvy drivers who would rather deal with their insurance company through an app than over the phone. Read on to learn which states are offering Lemonade auto insurance and how much it saves low-mileage drivers in this expert Lemonade review.
Lemonade is an innovative car insurance company that offers pay-per-mile coverage. The company leverages AI technology to create one of the simplest claims filing processes in the industry. Premiums can be cheap, but the company only sells car insurance in six states.
Lemonade's premiums depend heavily on a driver's mileage, driving history, and vehicle. Because Lemonade's algorithm analyzes a driver's past and their car's VIN, a more accurate quote can be generated on its website. That said, the following can give an idea of how much Lemonade charges in general.
| 35y, female, clean record | 35y, male, clean record | 35y, female, one accident | 18y, male, clean record |
|---|---|---|---|
| $60/mo + $0.15/mile | $60/mo + $0.15/mile | $64/mo + $0.15/mile | $116/mo + $0.84/mile |
Note: These insurance quotes were created by inserting various personas into Lemonade's algorithm. But since Lemonade uses specific data -- like a car's VIN number and driving records -- to create quotes, drivers will get more accurate results by inserting their own information.
Lemonade operates off of a pay-per-mile model, which charges drivers a base rate plus a per-mile rate each month. For example, if a driver has a base rate of $25 and a per-mile rate of $0.08, then driving 200 miles monthly would result in a total premium of $41. This can make Lemonade extremely affordable for those who don't drive frequently, or who only occasionally drive long distances (Lemonade has a daily mileage cap for each state, usually a maximum charge of 250 miles per day).
Lemonade offers several car insurance discounts, such as:
This list may not be comprehensive. Since these differ by driver profile and state, it's best to reach out to Lemonade directly to see which ones you might be eligible for.
Lemonade only offers automobile insurance. It doesn't offer insurance for ATVs, boats, RVs, or UTVs. That said, it does offer some coverage for electric bikes under its renters and homeowners insurance policies.
Lemonade offers a full suite of car insurance coverage options. Not only does it offer standard types of coverage (like liability and comprehensive) but it also offers some unique extras, like wall charger and pet injury coverage.
Unlike larger car insurance companies, however, Lemonade doesn't offer insurance for cars being used for business or commercial purposes, including ride-hailing services. So for drivers who use their cars for business, another car insurance company will need to be considered.
Lemonade policyholders can file car insurance claims directly through the app. Depending on the accident, Lemonade may ask drivers to take a video of their car, in order to get the full scope of the damages. Claims are handled quickly and payments are sent directly to a policyholder's bank account.
On third-party websites, Lemonade has generally positive reviews. For example, it currently boasts a 4.4 rating on Trustpilot (based on over 2,029 reviews), but has 2.09 out of 5 stars on the Better Business Bureau, with more than 190 complaints in the last 12 months. Keep in mind, though, that these reviews are for Lemonade as a whole, not just its car insurance segment.
For its part, the Lemonade Insurance app has excellent reviews. It currently boasts a 4.9 rating on the App Store (based on over 75,000 reviews) and a 4.3 rating on Google Play (based on more than 16,700 reviews).
Lemonade offers a completely digital experience for each of these services. What's more, since Lemonade is a public benefit corporation (a "B corp"), its goal isn't to make profits but to meet high standards of social and environmental impact. As such, its insurance products are generally more affordable than other insurers.
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When looking for coverage in all 50 states: Check out Progressive. While Progressive's app isn't quite as simple as Lemonade's, it does offer affordable coverage for most drivers. It also offers insurance for cars being used for business purposes, including rideshare insurance.
When looking for more discounts: Take a peek at Farmers. Farmers offers over 20 ways to get a discount on premiums, including traditional ones (like bundling and safe driving) and some unique ones, like on-time payment and having safety equipment installed. Farmers even offers its own mileage-based coverage, called FairMile, which functions similar to Lemonade's pay-per-mile model.
Lemonade is best suited for drivers who:
In sum, Lemonade will benefit low-mileage drivers, especially if they have an EV or hybrid. Those who don't live in Lemonade's coverage markets, or who want a more personalized customer service experience, might be better served by another car insurance company.
At Motley Fool Money, insurers are rated on a scale of one to five stars. We primarily focus on pricing, coverage options, and customer satisfaction; however, we also take into account features like unique discounts, online and app-based experiences, and branch access. Our highest-rated auto insurances generally include low costs, solid coverage, and high customer satisfaction.
Yes, it's a legitimate company. It's organized as an insurance company under New York law and trades publicly on The New York Stock Exchange.
Lemonade monitors driving habits to price a driver's policy. The company will track driving via its app and may adjust base or mile rates accordingly.
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