How We Calculated Homeowners Insurance Ratings
With its innovative, AI-assisted claims process, Lemonade stands out as one of the best homeowners insurance providers in the industry. In this article, we at the MarketWatch Guides team explore Lemonade’s coverage, pricing and customer reviews.
The listings that appear are from companies from which this website may receive compensation, which may impact how, where and in what order products appear. Not all companies, products or offers were reviewed in connection with this listing.
Quick Facts
- Average Monthly Premium: $122
- Percentage of Claims Approved: 100% (Based on three respondents)
- NAIC Complaint Level: High
- Endorsements for Natural Disasters: Earthquakes (in some states)
- Standard Coverage: Replacement cost value
Our Thoughts on Lemonade Homeowners Insurance
Lemonade uses AI-enabled technology to make the claims process fast and easy for homeowners who’ve suffered damage to their homes. Its speedy and frictionless claims process led us to name it the best provider for quick claim payouts out of the more than three dozen home insurance companies that we’ve reviewed. The company claims that about 40% of its insurance claims are handled instantly by AI, with payouts often distributed within seconds.
All that technology leaves little room for human interaction. If you prefer to speak to human home insurance representatives in person or by phone, Lemonade probably isn’t the best option for you.
Pros and Cons
Is known for its fast claims processing and payouts aided by AI
Maintains the Lemonade Giveback program that donates a portion of unused premiums to a charity of your choice
Provides a live chat feature during the quote process to get answers to your coverage questions
Is only available in 23 states and Washington, D.C.
Is digital-first, meaning in-person service options are not standard
How Lemonade Home Insurance Scored in Our Methodology
Lemonade’s homeowners insurance product tied for the fifth-highest overall score in our review methodology. The innovative provider scored a 4.3 out of 5 based on our objective evaluation of its average costs, customer experience, industry standing and coverage. It earned an impressive 4.8 out of 5 for customer experience and a perfect score in the coverage category, both for its quality standard insurance options and how easy it is to customize coverage.
The listings that appear are from companies from which this website may receive compensation, which may impact how, where and in what order products appear. Not all companies, products or offers were reviewed in connection with this listing.
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Lemonade Home Insurance Coverage Options
The following table details the standard coverage included in a Lemonade homeowners insurance policy, along with recommended amounts of coverage from the Insurance Information Institute.
Lemonade makes it easy to customize coverage limits during the online quote process. The company also gives you a host of options when it comes to insuring your personal property, including extra coverage for high-value items, including jewelry, cameras, fine art and musical instruments.
| Coverage Area | Recommended Amount |
|---|---|
| Dwelling | To be fully covered here, you should carry dwelling coverage equal to the cost to fully replace or rebuild your home. |
| Other Structures | 10% of dwelling coverage limit |
| Personal Property | 50% of dwelling coverage limit |
| Loss of Use | 10% of dwelling coverage limit |
| Personal Liability | $100,000 to $500,000 |
| Medical Payments | $1,000 to $5,000 |
Endorsement Options
You can tailor your Lemonade home insurance policy to fit your needs with the following add-ons:
- Extra valuables: Similar to most home insurance companies, Lemonade’s standard policy doesn’t cover damage to high-value items, such as jewelry and fine art. You’ll have to add extra coverage to protect jewelry, fine art, bikes, cameras or musical instruments.
- Swimming pool liability: You can extend your liability coverage to help pay for accidents in your pool, which is excluded from standard coverage.
- Additional insured: For a few dollars extra per month, you can add your unmarried, live-in partner to your policy’s liability coverage.
- Water backup: With this endorsement, you can add coverage up to a certain limit for damage caused by water coming from your sewer or septic line, which is excluded from your standard policy.
- Equipment breakdown: This add-on can help you pay to repair or replace your home systems, such as your HVAC unit, refrigerator or washing machine, if they break down due to a mechanical or electrical issue. It comes with a $500 deductible. This coverage doesn’t kick in for issues related to wear and tear — that’d be covered by a home warranty, if you choose to have one.
- Extended reconstruction cost: You can pay to augment your dwelling coverage if the cost to repair or rebuild your home exceeds your dwelling limit. Extended dwelling coverage can protect you from inflating prices for materials and labor that you can’t predict when purchasing the policy.
Lemonade Home Insurance Cost
We found that the average Lemonade home insurance policy costs $1,461 per year. Homeowners insurance quotes vary greatly depending on the home and the homeowner. You can expect the following factors to impact your Lemonade premium:
- Location: Your ZIP code can have a major influence on your quoted premium because some areas in the United States have a considerably higher risk of potential perils than others. Additionally, home rebuilding and repair costs vary by area, which in turn affects how much you’ll pay for your policy.
- Home size and type: Larger homes are costlier to insure than smaller homes because they require a higher dwelling coverage limit. Additionally, your home’s features and construction materials can also make it more or less expensive to repair or replace than the average home.
- Age: In general, newer homes come with cheaper homeowners insurance prices because their structures and materials are sturdier than older homes. Additionally, your roof’s age can have a meaningful effect on your Lemonade policy’s cost, especially if it’s a standard asphalt roof that hasn’t been replaced in the last 20 to 30 years.
- Personal information: When you get a quote from Lemonade, you’ll be asked about your claims history and to provide the last four digits of your Social Security number. If you’ve filed an insurance claim within the past five years, your quote will likely come in higher than someone with a clean claims history. A poor credit score may also affect your quoted rates (if your state lets home insurance companies consider credit information when pricing premiums).
- Policy customization: Once you get your initial quote, you’ll be prompted to customize your deductible and coverage by choosing from various limits for each coverage category. Lemonade presets your dwelling coverage to what its tool estimates your home’s reconstruction value to be worth, but you can change it according to your needs. You can check for additional discounts before getting your final rate and signing up for the policy.
Lemonade Home Insurance Discounts
Lemonade automatically assesses your application and gives you discounts based on factors such as the age of your home. The company may also offer the following discounts to help you save even more:
- Home security discount: Theft protection features, such as deadbolts, burglar alarms and home security systems that report to the police station, can save you money on your premium.
- Fire safety discount: Fire safety devices, such as a fire extinguisher, sprinkler system, smoke detector, fire alarm and fire reporting system, can reduce your premium.
- Water leak detection discount: Having a water leak detection system that alerts you of leaks or potential water damage can score you a discount.
- Gated community discount: You can receive a discount for living in a gated community or neighborhood because it reduces your home’s risk of burglary.
- Bundling discount: You can get a discount for bundling with another policy, such as Lemonade pet insurance or term life insurance.
Lemonade Claims Process
Both in terms of claim approval and average approval time, Lemonade checks in just behind the industry average in our 2025 home insurance claims study. Here’s a look at the numbers:
| Company Offering | Lemonade | Industry Average |
|---|---|---|
| Average Claims Approval Time | 0 to 6 days | 1 to 2 weeks |
| Percentage of Claims Approved | 100% (Based on three respondents) | 91% |
| Claims Satisfaction Score | 100% | 89% |
What Customers Think of Lemonade Insurance
When researching the top players in the home insurance industry, we analyzed more than 100 reviews posted on third-party websites, such as the Better Business Bureau and Trustpilot, for each provider to get a sense of their overall customer feedback.
BBB and Trustpilot both feature a mix of positive and negative comments about Lemonade’s homeowners insurance policies. For instance, some satisfied customers discuss experiences with the fast, hassle-free claims process that the company promises, while others complain about drawn-out claims and unexpectedly denied payouts. When we reached out to Lemonade about the negative reviews, the company did not respond.
Lemonade Versus the Market
Lemonade compares favorably to some of the top names in the home insurance industry when it comes to average premium rates. However, Lemonade homeowners insurance policyholders make complaints to the National Association of Insurance Commissioners at a significantly higher rate than State Farm and Allstate homeowners insurance policies. Lemonade’s NAIC score implies that the company receives nearly four times the expected volume of complaints related to its homeowners insurance policies.
We reached out to Lemonade for comment on the high volume of complaints through NAIC but did not receive a response.
The listings that appear are from companies from which this website may receive compensation, which may impact how, where and in what order products appear. Not all companies, products or offers were reviewed in connection with this listing.
| Our Top Pick | |||
|---|---|---|---|
|
Average Annual Premium
|
$1,461
|
$2,362
|
$2,763
|
|
Percentage of Claims Approved
|
100% (Based on three respondents)
|
93%
|
93%
|
|
NAIC Complaint Score
|
3.85
|
1.22
|
1.75
|
|
Endorsements for Natural Disasters?
|
Earthquake
|
Earthquake
|
Flood, earthquake
|
|
Standard Coverage
|
Replacement cost value
|
Actual cash value
|
Actual cash value
|
| Key Metrics | Average Annual Premium | Percentage of Claims Approved | NAIC Complaint Score | Endorsements for Natural Disasters? | Standard Coverage | |
|---|---|---|---|---|---|---|
|
$1,461
|
100% (Based on three respondents)
|
3.85
|
Earthquake
|
Replacement cost value
|
|
|
|
$2,362
|
93%
|
1.22
|
Earthquake
|
Actual cash value
|
|
|
|
$2,763
|
93%
|
1.75
|
Flood, earthquake
|
Actual cash value
|
Frequently Asked Questions about Lemonade Home Insurance
Lemonade’s homeowners insurance policies are comprehensive and include all the standard coverage categories that most insurers offer, such as dwelling, liability and personal property when they’re impacted by an unexpected covered event.
However, like all home insurance carriers, Lemonade doesn’t cover flood damage, which is damage to your home’s structure or your belongings due to water from the outside entering your property. It also doesn’t cover earthquakes, but extra coverage for those can be added to your policy if you live in California or Arkansas.
Lemonade holds what it asserts is the world record for the fastest-paid insurance claim, paying a claim in three seconds after it was filed. Its AI bot runs anti-fraud algorithms to analyze the sincerity of the claim, processes all the details and makes a quick decision on how much money you’re owed. While every claim won’t necessarily be handled this quickly — some may require a human to step in — Lemonade’s overall claims process is straightforward and easier than many competitors that we’ve reviewed.
In order to process the claims quickly, policyholders are asked to submit a video explaining their claim.
In addition to offering homeowners insurance for single-family homes, Lemonade also offers policies for condos, co-operatives, triplexes, duplexes and townhouses. It also can provide you with term life insurance, pet insurance, renters insurance and auto insurance in select states.
Lemonade is a Certified B-Corp and Public Benefit Corporation. Nina Rauch, senior social impact lead at Lemonade, told us that the “intent on proving that our commitment to worthy causes is hardwired in our DNA.” She added that Lemonade’s Giveback program has supported more than 100 nonprofit organizations since 2017 and has raised more than $4 million for charitable causes that their policyholders chose.
