Is Lemonade a real insurance company?

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.

Does Lemonade use telematics?

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.

Lemonade Auto Insurance Review: AI-Powered Insurance That's Fun and Affordable

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.

Best for: Pay-per-mile policiesLemonade

Rating image, 3.50 out of 5 stars.

3.50/5

Bottom Line

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.

Pros

Cheap rates for infrequent drivers
Simple and advanced app
Super fast claims process
Emergency crash and roadside assistance

Cons

Not available in every state
Doesn't offer insurance for ride-hailing or business vehicles

Full Lemonade auto insurance review

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Monthly premium costs

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

Data source: The Ascent's analysis of standardized personas.

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.

Cost comparison

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).

Discounts

Lemonade offers several car insurance discounts, such as:

Advanced savings discount
Bundling
Claims free
Good driver
Telematics participation

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.

Coverage

Policy types

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.

Coverage types

Bodily injury
Collision coverage
Comprehensive coverage
Glass coverage
Medical payments
Personal injury protection
Pet injury
Property damage
Roadside assistance
Temporary transportation coverage
Uninsured driver (property damage)
Uninsured/underinsured driver bodily injury
Wall charger coverage

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.

Customer service and ratings

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).

Other insurance available

Condo insurance
Homeowners insurance
Pet insurance
Renters insurance
Term life insurance

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.

Alternatives to consider

2024 Award Winner

Best for coverage options and discountsProgressive

Rating image, 4.00 out of 5 stars.

4.00/5

Get a Quote

Read our Progressive review

Customized coverage with local agent supportFarmers

Rating image, 3.50 out of 5 stars.

3.50/5

Read Review

Read our Farmers review

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 auto insurance summary

Lemonade is best suited for drivers who:

Drive infrequently and have good records
Want affordable premiums
Live in Arizona, Illinois, Ohio, Oregon, Tennessee, Texas, or Washington
Prefer to handle claims via an app rather than on the phone

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.

Review sources

Our auto insurance rating methodology

At The Motley Fool Ascent, 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.

FAQs

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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