Lemonade auto insurance review: Cheap for good drivers
Lemonade may be new to car insurance, but it offers cheap rates for good drivers. It’s only available in a handful of states for new.
By
Andrew HurstAndrew HurstSenior Editor & Licensed Auto Insurance ExpertAndrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.
Edited by
Anna SwartzAnna SwartzSenior Managing Editor & Auto Insurance ExpertAnna Swartz is a senior managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.
Our proprietary ratings methodology takes multiple factors into account, including customer satisfaction, cost, financial strength, and policy offerings. See the “Ratings methodology” section for more details.
2.9
AM Best rating
AM Best is a global credit rating agency that scores the financial strength of insurance companies on a scale from A++ (Superior) to D (Poor).
NA
Cost
Using a mix of internal and external rate data, we grade the cost of each insurance company's premiums on a scale from least expensive ($) to most expensive ($$$$$).
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The bottom line
Lemonade, mostly known as a millennial-friendly home and renters insurance company, started offering its own car insurance in 2021 and acquired the pay-as-you-go car insurance company Metromile in 2022.
Lemonade mostly offers usage-based car insurance, which means your driving will be tracked and your car insurance rates are based on your speed, braking and acceleration, phone usage, and when and how often you drive.
You don’t have to agree to data sharing to get car insurance from Lemonade, but without the usage-based discount, Lemonade can be expensive, and may not be worth it.
Lemonade also does customer service differently from other companies. You can ask questions and make claims with the company’s AI program, “Maya.” The company hasn’t hasn’t received any complaints with the NAIC since it started offering car insurance, but since it’s new and only offers coverage in a few states, take this with a grain of salt.
Collision coverage: Covers the cost of damage to your own car after an accident with an object or another car.
Comprehensive coverage: Covers the cost if your car is damaged by things like theft, vandalism, flooding, fire, or falling objects, but not after a collision.
Personal injury protection: Covers your injuries after an accident regardless of fault, including lost wages, and medical care (required in no-fault states).
Medical payments: Covers your injuries after a crash, but often has lower limits than personal injury protection.
Additional coverages offered
Lemonade doesn’t offer as many auto insurance endorsements as its competitors, but a couple of them come free with your policy, which is a perk.
Emergency crash assistance: This isn’t actually a separate coverage, but if you share your real-time driving data with Lemonade the company will send emergency help after an accident.
Full glass coverage: If you have comprehensive and collision, you can add full glass coverage to your Lemonade policy, which waives the deductible for windshield or window repairs or replacement.
Rental car reimbursement coverage: Covers the cost of a rental car, public transportation, a rideshare service like Lyft or Uber, or another temporary way of getting around if your car’s in the shop after a covered accident.
Roadside assistance coverage: Covers services like towing, winching, fuel delivery, and battery replacement if your car breaks down. Roadside assistance is free if you share driving data with Lemonade.
Lemonade doesn’t offer gap insurance, so drivers with a loan or lease who are required to have gap coverage as part of their policies will have to look elsewhere for coverage.
Ratings methodology
Price
3.1/5
We found the cost of Lemonade car insurance using rates from ZIP codes in Illinois, Ohio, Oregon, Tennessee, and Texas — the states where Lemonade offers coverage. These sample rates were for a 30-year-old driver who drove a 2018 Toyota Camry LE with no previous accident or claims history. Lemonade is $329 more expensive than average, but it depends on your location and how well you drive.
Customer experience
4.8/5
Lemonade has a complaint index of 0.00 according to the National Association of Insurance Commissioners. This means that Lemonade has received no complaints for service, price, claims process, or claims settlements. However, Lemonade car insurance has not yet been rated by J.D. Power.
Coverage options
2.9/5
We gave Lemonade points for each of the types of car insurance that it offers. When we compared its coverage score against its competitors, we found that Lemonade offers fewer car insurance add-ons than competitors.
Financial strength
NA
Lemonade hasn’t been rated by Moody’s, S&P, or by AM Best. It has received an A rating from Demotech, an insurance rating agency that focuses on rating smaller insurance companies.
Cost of Lemonade car insurance
Lemonade car insurance is $164 per month on average, which is more expensive than the national average cost of a full-coverage policy with the same limits. You won’t get a good-driving discount until after renewing your policy, but it could make your rates much cheaper than these average rates.
Coverage amount
Average annual rate for Lemonade
Required state minimum
$1,855
Full coverage ($50,000/$100,000)
$1,967
Full coverage ($100,000/$300,000)
$2,042
Based on sample drivers in Illinois, Ohio, Oregon, Tennessee, and Texas.
Car insurance discounts from Lemonade
In addition to low-rates for usage-based insurance, Lemonade offers a few other car insurance discounts:
Multi-policy discount: Get a discount if you also have homeowners, renters, life, or pet insurance with Lemonade.
Quote-in-advance discount: Receive a discount if you request a quote and buy car insurance at least a week before your policy goes into effect.
How Lemonade sets car insurance prices based on your driving
If you opt in to data-sharing, Lemonade sets your car insurance rates based on how well you drive. You can either use the company’s app or a plug-in device that you receive in the mail, to track behavior like:
Your speed
Your braking and acceleration
The time of day your drive
How often you text or make calls while driving
Your discount won’t be applied until after your first policy term is up, but that also means your car insurance rates could go way down at renewal.
You don’t have to agree to share this data with Lemonade, but if you don’t, you’ll miss out on cheaper rates (Lemonade is more expensive than average if you don’t share your driving habits), faster claims service, and free roadside assistance.
One potential downside of sharing this data is that you have to keep location-sharing services on at all times. That even includes when you’re in someone else’s car or a taxi. Your own rate probably won’t be affected when you’re not the one behind the wheel, but Lemonade recommends reaching out to make sure only the right information is used.
Where is Lemonade car insurance available?
Lemonade auto insurance is available in six states:
Arizona
Illinois
Ohio
Oregon
Tennessee
Texas
Lemonade does not yet offer car insurance in major markets like California, Colorado, Florida, or New York.
Lemonade and Metromile
Even though Lemonade purchased the pay-per-mile car insurance company Metromile in 2022, Lemonade does not yet offer a standalone per-mile insurance plan, where your rates are based just on how much you drive.
But anyone with an existing Metromile policy was moved over to Lemonade, and Lemonade’s usage-based rates mean you can still get lower rates for driving less often.
What to expect with Lemonade insurance
How to get a quote: You can get a quote through the Lemonade app or website after entering a few personal details about where you live, your car, and your driving history.
Customer service options: You can access Lemonade customer service through the app or website, or by phone at (844) 733-8666.
How to file a claim: You can file claims with Lemonade’s app. When you do, you’ll record a video about the incident. You’ll interact with Lemonade’s AI Maya unless the claim can’t be paid instantly, in which case you’d work with humans.
How to cancel your policy: You can cancel your Lemonade car insurance policy at any time through the Lemonade app and get a refund for the remainder of your policy.
Lemonade vs. other car insurance companies
The easiest way to find the right car insurance is by comparing quotes from different companies. Here’s how Lemonade stacks up against competitors:
Yes, Lemonade is a legitimate insurance company. It’s a publicly-traded company that’s gotten an A rating from the credit rating agency Demotech.
What are the downsides of Lemonade car insurance?
One downside of Lemonade car insurance is that it’s not available in many states. If you live outside of Illinois, Ohio, Oregon, Tennessee, and Texas, you won’t be able to bundle your Lemonade home or renters insurance with an auto policy yet. Another downside can be its price, which can be expensive — especially if you’re not a good driver.
What does insurance cost at Lemonade?
The average cost of car insurance from Lemonade is $164 per month, or $1,967 a year. That’s more expensive than average. However, your rates may be much lower with Lemonade’s “fair pricing” discount, which uses real-time driving data to set your rates.
Who can get Lemonade car insurance?
Anyone can get Lemonade car insurance, but it’s only offered in Illinois, Ohio, Oregon, Tennessee, and Texas.
Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.
Anna Swartz is a senior managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.
