Lemonade Auto Insurance: Worth The Squeeze?

Lemonade offers car insurance, including full-coverage auto insurance, with some additional extras such as temporary transportation coverage, extended glass coverage, and roadside assistance. Lemonade's car insurance is currently only available in a few states, including Illinois, Ohio, Oregon, Tennessee, and Texas. The company uses telematics to track your driving behaviour and determine your insurance premium. This means that your premium is based on how much and how safely you drive, rather than on demographics. The Lemonade app also uses location-based technology to make insurance more affordable for customers.

Telematics-based and AI-powered insurance

Lemonade is a relatively new insurance carrier that offers renters, homeowners, car, pet, and term life insurance. The company uses artificial intelligence to help users buy insurance, file claims, and receive payouts. Lemonade's auto insurance is currently only available in Illinois, Ohio, Oregon, Tennessee, and Texas.

Lemonade uses telematics and location-based technology to determine insurance premiums. By collecting data about a user's driving safety and mileage, Lemonade can offer lower rates to safer and lower-mileage drivers. This usage-based insurance model also allows Lemonade to offset drivers' carbon emissions by planting trees based on the number of miles driven.

The use of telematics and AI in auto insurance is becoming increasingly popular, with many traditional insurance providers adopting this technology. Telematics allows for the real-time streaming of data, resulting in more accurate risk assessments, faster underwriting, and lower-cost premiums. It also enables insurance companies to provide tailored insurance solutions and incentivize greater road safety and vehicle maintenance.

AI is having a significant impact on the insurance industry, streamlining processes, reducing costs, and improving the customer experience. It helps insurance companies put massive amounts of data to optimal use, craft individualized policies, automate processes, and provide more accurate estimates. AI also enables faster claims processing, quick approval, and efficient fraud detection.

In the future, AI is expected to revolutionize the insurance industry even further, with advanced technologies and data already affecting distribution and underwriting. AI will enable faster and more efficient purchasing of insurance, with risk profiles created by AI algorithms reducing the time required to complete the purchase of an auto, commercial, or life policy to just minutes or even seconds.

Overall, the integration of telematics and AI in insurance offers numerous benefits, including improved accuracy, efficiency, and personalization.

Discounts for low-mileage drivers

Yes, Lemonade does offer auto insurance. And yes, they do offer discounts for low-mileage drivers.

Lemonade uses location-based technology (telematics) to track your driving and price your insurance policy accordingly. This means that the less you drive, the less you pay.

Lemonade considers drivers who drive fewer than 9,000 miles per year as low-mileage drivers. This is based on the 2019 report by the U.S. Department of Transportation Federal Highway Administration (FHWA), which found that the average American driver racks up around 14,263 miles annually.

With Lemonade, low-mileage drivers can benefit from a pay-per-mile insurance program. This means that policyholders pay a monthly base rate that doesn't change, as well as a per-mile rate that is charged based on how many miles are driven each month.

Lemonade also offers additional discounts for drivers of electric vehicles and hybrids, as these cars reduce carbon dioxide emissions.

Emergency crash and roadside assistance

Lemonade offers emergency crash and roadside assistance as part of its car insurance policy. This service is available to all drivers listed on a Lemonade Car policy who have the Lemonade app installed and location services enabled.

Lemonade's emergency crash assistance uses location services and driving patterns to determine if you've been in an accident. The app will then call you to check if you and your passengers are okay and if you need emergency help. If you do, it can make the call for you.

Roadside assistance is an emergency service that provides towing and other services in the event of a breakdown or collision. Lemonade's roadside assistance is provided by its partner HONK Technologies, Inc., which has a network of independent roadside assistance and towing service providers.

• Towing: If your car breaks down or can't be driven, Lemonade will arrange to tow your car to your chosen destination up to 15 miles from the car's location or to the nearest repair shop. Towing is also provided after an accident and is usually covered by your comprehensive or collision coverage.
• Jump starts and electric vehicle charging: If your battery dies, Lemonade will send someone to jump-start your car or tow you to an EV charging station.
• Fuel delivery: If you run out of gas, Lemonade will deliver up to 2 gallons of standard car fuel (gas or diesel) to help you get back on the road.
• Flat tire assistance: As long as you have a fully inflated spare tire, Lemonade can send someone to change your flat tire.
• Locksmith services: If you're locked out of your car, Lemonade will send someone to unlock the doors.
• Winching: If your car is stuck in mud, grass, ice, or snow, Lemonade will send someone to pull your car out.

It's important to note that Lemonade's roadside assistance does not cover the cost of repairs or labour performed at a service station, garage, or repair shop. It also doesn't include the cost of purchasing parts, fluids, lubricants, or replacement keys. Additionally, services provided by providers outside of Lemonade's network are not reimbursed.

Discounts for bundling policies

Lemonade offers bundling discounts for combining any of its insurance products, including renters, homeowners, car, pet, and life insurance. By bundling policies, customers can unlock savings on all of their insurance policies. For example, if a customer bundles renters and car insurance, they can benefit from a simplified management process and reduced paperwork, as they will only have one point of contact for claims and questions. Additionally, bundling car and renters insurance can provide comprehensive coverage for customers' belongings. For instance, if a thief breaks into a customer's car and steals their laptop, comprehensive car insurance coverage will cover the property damage to the vehicle, while renters insurance will cover the stolen laptop.

Lemonade also offers unique discounts for bundling life insurance with other policies. If a customer bundles life insurance with renters insurance, they will receive a discount on their renters policy.

Bundling insurance policies with Lemonade can be a convenient and affordable way for customers to protect their belongings and gain peace of mind. By combining multiple policies, customers can streamline their insurance experience and benefit from significant cost savings.

Available in select states

Lemonade auto insurance is currently only available in a few states. As of March 2024, Lemonade car insurance was available in seven states: Arizona, Illinois, Ohio, Oregon, Tennessee, Texas, and Washington. However, other Lemonade insurance products are available across the US, and the company has stated that it plans to expand its car insurance offering to more states soon.

As of July 2024, Lemonade's website states that its car insurance is available in Illinois, Ohio, Oregon, Tennessee, and Texas.

Lemonade's car insurance uses telematics to track driving behaviour and location, and this data is used to calculate insurance premiums. This means that Lemonade's car insurance is best suited to those who are comfortable with sharing their data and who are happy to use an app-based service. The app is required to manage policies, file claims, and access certain services.

The company was founded in 2015 and is a certified B-corp, which means it is a public benefit company that uses its funds to pay claims, give back through its Giveback Program, and take a flat fee. Lemonade is also a legitimate insurance carrier, reinsured by trusted names in the industry, and traded on the NYSE.

Frequently asked questions