AutoInsurance.com
January 12, 2023

Lemonade Car Insurance Pricing

Car insurance prices based on your miles driven and carbon emissions

Lemonade car insurance adopts a modern pricing approach: The less you drive, the less risky you are, which will get you better rates with the company. When you buy insurance from Lemonade, the company bases your rate on your actual mileage because it uses technology to monitor your driving history. Lemonade is an excellent option for those who drive less and want to save money on car insurance. This pricing guide looks at the average cost of Lemonade car insurance, its key features, and discounts.

Car Insurance Rates

Lemonade car insurance sits below the national average for car insurance rates. The average annual rate with Lemonade is $1,590, while the national average is $2,071. Lemonade bases premiums on what it calls a Safety Score, which is determined by your annual mileage, violations history, claims history, and driving behavior. The device and app take your actual mileage when you drive to update your premium over time.

Here are Lemonade’s costs for different driver profiles:

  • Full coverage, clean driving history: $1,771
  • Speeding ticket: $2,138
  • At-fault accident: $2,521
  • Adding a 16-year-old driver: $3,852

As you can see, rates vary depending on your driving history and age. Your rate will also be contingent on the type of car you drive, your location, and any discounts that Lemonade can apply to the policy.

When shopping for rates, be sure to compare apples to apples. Have the same amounts listed for chosen coverages, such as comprehensive, collision, medical payments, and property damage liability.

Discounts

  • Accident-free discount: This discount applies when you have a five-year history of no at-fault accidents.
  • Anti-theft discount: Get a discount when you have factory-installed or aftermarket anti-theft equipment on your car.
  • Bundle discount: Lemonade has other insurance products that qualify you for a discount when you add them along with your auto insurance policy. Unlike other companies that only bundle with homeowners or renters insurance, Lemonade provides a discount if you have pet health insurance or term life insurance.
  • Continuous insurance discount: Keep a policy on the car (including previous insurers) with no gaps in coverage, and you’ll be eligible for this discount.
  • Driving with location services on: When you give Lemonade more access to your driving patterns by allowing the app’s location services to run while driving, you become eligible for another discount on top of per-mile savings.
  • Hybrid/EV discount: When you insure a hybrid or an electric vehicle (EV), you’ll get a discount.
  • Multi-car discount: When you insure more than one vehicle with Lemonade, you’ll get a discount.
  • Paid-in-full discount: Lemonade lowers your policy’s premium when you pay it at once.
  • Savings for planning ahead: Get a discount when you sign up for auto insurance before your coverage start date.
  • Senior defensive driver discount: If you are 50 years old or older and complete an approved defensive driving course, you can get a discount. You’ll need to take a course every three years to maintain the discount, however.
  • Smart technology discount: Features like automatic braking or blind-spot monitoring make your car safer to drive, which results in savings.
  • Teen driver discount: When you have a licensed driver under the age of 19 with continuous coverage on the car, you’ll get a discount.
  • Three-year safe-driving discount: Become eligible for a discount when you have three years of a clean driving record.

Favorite Features

Per-Mile Price Model

Lemonade is a new breed of car insurance that prices policies based on actual miles driven. The less you drive, the more you save. It uses a telematics device that you install on the car. Lemonade monitors your driving on the corresponding app and reports it to the company.

It’s easy to use, and while Lemonade says that the lower price is due to lower emissions, less driving also means you are at less risk of an accident.

Gap Insurance

Gap insurance pays off your car loan or lease when you total your car in an accident and you owe more than it’s worth.1 Lemonade includes gap insurance with its policies.

Emergency Charging

Lemonade has extra, free perks for people who drive EVs. If you’re stuck somewhere with your EV battery drained, Lemonade will send a charging truck to your location. You’ll get the charge you need to get home and plug in.

Charger Coverage

Most auto insurance companies will insure only the car. However, the car charger for an EV is essential to the car’s running. Lemonade provides coverage for your charger in the event that something damages it. Covering this accessory means that your EV gets protection from the wall to the bumper.

Temporary Transportation Coverage

Most insurance companies offer rental car reimbursement coverage, which pays for the rental of a vehicle while yours is in the shop under a covered claim. In addition to rental car coverage, Lemonade offers temporary transportation coverage. It offers a daily limit that you can use for either rental car coverage, public transportation, or rideshare costs. Elect a limit of $40, $50, or $60 per day.

Extended Glass Coverage

Comprehensive coverage pays for property damage (other than collisions) that is beyond your control, such as when a tree falls on your car or a thief breaks in. When choosing comprehensive coverage, you can opt for extended glass coverage, which means that you can choose a lower deductible just for the glass. If a thief breaks a window to steal something, you’ll pay a lower deductible.

In fact, one option is to have no deductible at all, though premiums will be higher. Still, the lack of deductible will be a silver lining on the day when something breaks the glass.

CheckTIP:

Keep a low or no deductible on glass. Having a lower deductible on glass repairs can save you a lot of money. You never know when a rock will hit the windshield or if someone will break in by shattering the glass. When you don’t have a deductible, you can get the glass fixed quickly without much of a headache.

Car Roadside Assistance

Lemonade car insurance offers free roadside assistance to their drivers. Roadside assistance includes services such as changing a flat, jump-starting, and towing.

Emergency Crash Assistance

Emergency crash assistance is a feature of the app that uses location services and driving patterns to determine if you’ve been in an accident. The app initiates a phone call from the Lemonade team to make sure that you and your passengers are OK and to determine if you need emergency help. If you need help, it can make the call for you.

Online Services Save You Money

Lemonade relies on technology to manage the sales and servicing of insurance policies. A telematics device a driver installs in their car tracks driving habits, and the Lemonade app processes claims. By not relying on humans, Lemonade can save on overhead costs. Lemonade passes these savings on to consumers through lower insurance premiums.

Artificial Intelligence

Lemonade insurance uses artificial intelligence to gather 100 times more data points than traditional insurers. The result is nuanced profiles of customers that become remarkably insightful about driving behavior and activity.

Lemonade uses AI in the claims process, reviewing nonverbal cues from video submissions of claims to look for signs of fraud.2 The mobile app can tell when and where the claim was made, how long you took to fill out each part, and whether or not you changed any answers. It even evaluates your tone of voice and facial expressions.

Availability

Lemonade car insurance is a new carrier, having opened its doors in 2015. As of December 2022, car insurance is available only in Illinois, Ohio, and Tennessee. Lemonade also owns Metromile, another pay-per-mile insurer, which is available in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.

Lemonade has a notification service for those who want to know when its insurance will be available in their area. It may also use this service to gauge interest areas and plan its next rollout, so signing up may help Lemonade become available in your area sooner rather than later. Sign up to be notified here: ​https://www.lemonade.com/lemonade-goes-global.

Cancellation Policy

To cancel your policy, log in to the Lemonade app, select your policy, and hit Cancel. If you want to speak with a live person, you may call customer service during business hours at 844-733-8666.

When you cancel, you’ll get a refund of any prepaid premium. The company won’t keep the unused premium and will process a refund within a few weeks.

CheckTIP:

When shopping for insurance, sometimes you can get a discount for starting a policy before your existing policy expires. In cases like this, don’t hesitate to move your insurance to the new carrier because you can rest assured that the old carrier will pay you back for any unused premium.

Company Background

Daniel Schreiber and Shai Wininger founded Lemonade insurance in April 2015. The company maintains its headquarters in New York. It offers homeowners, renters, pet, life, and car insurance.

The car insurance arm of the company launched in 2021 when it announced the acquisition of Metromile. Metromile offers premium per-mile insurance policies that fit with the policies that Lemonade developed. Lemonade finalized the acquisition in July 2022.3

Lemonade Contact Information

Lemonade’s business model allows you to do everything from signing up to processing a claim from its app directly. However, there may be times when you want to give the company a call or send an email requesting support. The contact information for Lemonade is as follows:

  • Phone: 844-733-8666
  • Email: help@lemonade.com

Business hours are Monday through Friday from 9 a.m. to 8 p.m. ET.

Conclusion

If you are in a state where Lemonade car insurance is available, it makes sense to get a quote. The rates are highly competitive, falling well below the national average, and the price-per-mile model is ideal for those who don’t drive far daily. On top of its great rates, it offers a plethora of discounts to help you save even more. Take the time to get a Lemonade car insurance quote today and see how much you can save.

Frequently Asked Questions

When will Lemonade offer car insurance?

As of December 2022, Lemonade offers car insurance in three states: Illinois, Ohio, and Tennessee. It is actively looking to expand in other areas where it offers homeowners and renters insurance so that consumers can bundle policies and save.

How does Lemonade car insurance work?

Lemonade uses a telematics device in your car that works with an app to track your mileage and driving habits. Drivers that put fewer miles on their cars pay less because Lemonade bases rates on a per-mile basis.

Why is Lemonade auto insurance so successful?

Lemonade insurance is successful because buyers benefit from cost savings in the per-mile premium rating. Additionally, users can do everything through the app, from filing a claim to changing their coverage limits. Lemonade has a lower overhead because it doesn’t have agent offices.

How long does it take Lemonade to approve a claim?

Most Lemonade claims get approved instantly because the company uses artificial intelligence and anti-fraud algorithms to determine the validity of claims. As a result, Lemonade can pay claims faster than more traditional car insurance companies.

Citations

  1. What is gap insurance? Insurance Information Institute.
    https://www.iii.org/article/what-gap-insurance

  2. Insurance, reimagined. Volt Equity.
    https://www.voltequity.com/thesis/lemonade-disrupting-insurance-with-artificial-intelligence#

  3. LEMONADE COMPLETES ACQUISITION OF METROMILE. Lemonade. (2022, Jul 28).
    https://investor.lemonade.com/news-and-events/news/news-details/2022/Lemonade-Completes-Acquisition-of-Metromile/default.aspx