I signed up for renters insurance through millennial-friendly Lemonade, and it felt more like ordering dinner on Seamless than protecting my home
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- Lemonade is a millennial-friendly insurance company that uses artificial intelligence to give quotes and evaluate claims quickly.
- Its renters insurance policies cover personal property, personal liability, loss of use, and medical payments.
- Because Lemonade's cofounders don't come from the insurance world, it's an insurance product that feels accessible, more like ordering dinner online than protecting your home from future damage.
- Lemonade also gathers a lot of data on its users, thanks to its artificial intelligence, and donates some of the money that goes unclaimed by policy holders every year to charity.
- Learn more about renters insurance with Lemonade »
I consider myself moderately prepared at all times.
I bring my umbrella with me when it's foggy outside, mostly. When I pack for trips, I include double the pairs of underwear I'll need - but usually forget my toothbrush. A container of floss lives in my backpack, though I rarely remember to transfer it to my purse.
All this is to say, I've thought before about buying renter's insurance. But it was my partner who took the plunge and signed us up for Lemonade.
Lemonade is an insurance company that boasts the ability to process claims in just three seconds, thanks to its artificial intelligence software. Luckily, we haven't had to test this turnover time yet.
Neither of Lemonade's cofounders, Daniel Schreiber and Shai Wininger, were in the insurance business before starting the company, so it feels different from using something like State Farm. It's more like using a tech service that targets millennials, akin to a Seamless or a Capsule.
This translates to Lemonade's user-friendly interface on both its website and app. To see how much we'd have to pay for renter's insurance for our one-bedroom Brooklyn apartment, we had to start by answering a series of straightforward questions. Do you have roommates? Yes. A fire alarm? Yes. A dog? No, unfortunately. That was pretty much it. Then we got our quote: $10.25 per month. Split between the two of us, this is very manageable.
That base amount could change depending on what kind of items/events we wanted to insure. Again, the interface for adjusting this is friendly - even, dare I say, fun.
Lemonade starts you out with a set amount of money you're insured for in the categories of personal property, personal liability (if someone gets injured in your apartment and sues), loss of use (a hotel stay if your apartment becomes unlivable), and medical payments (if someone gets injured in your apartment and you contribute to their medical costs).
Using plus and minus sign buttons, you can see how much your monthly payment changes depending on how you adjust each category.
For example, for $10.25 per month, I'm insured for $30,000 worth of personal property. If I decide that my property isn't worth that much, I can hit the minus and go down to $20,000. That brings my cost per month to $7.42.
But maybe I want to be covered for more than $6,000 worth of hotel stays if something drastic happens to my apartment. I'm more a Four Seasons than a Holiday Inn type, so I want $12,000 to pay for my room. From the original $10.25 per month, that only brings me up to $11.09.
You can also add extra coverage for valuables like fine art, expensive jewelry, bicycles, and musical instruments. One day I might have some of these things, but for now, it's irrelevant. My partner and I ended up sticking with the $10.25 monthly fee (I'm not really a Four Seasons type).
However, we did have to tack on an extra $1.67 to ensure us both - the tax for the unwed. Spouses get to share Lemonade's renter's insurance for free. If we were roommates who are not romantically involved, we'd each have to pay for entirely separate insurance policies. This brought us up to $11.92 per month, so $5.96 each.
I recently read an article by Business Insider's Tanza Loudenback, who pays $11.91 per month for renter's insurance through State Farm. That would compare almost exactly to Lemonade, if it weren't for the fact that the State Farm insurance originally started at $17.24 per plan and went down after two years.
My hesitation with cheap, easy-to-use tech services like Lemonade lies in their data collection. In a Tech Crunch Disrupt talk this past September, Lemonade CEO Schreiber said that while his company is at a data disadvantage compared to insurance companies that have been around for decades, Lemonade "gathers about 100 times more data for every customer" because of all the digital interactions that occur between customers and the site's chatbots.
Sure, predictive data is how insurance companies function, but for the paranoid, hearing how much information Lemonade is getting from its customers sounds unsettling.
The service makes up for this somewhat by donating some of the money that isn't claimed by policyholders to nonprofits at the end of each year. We chose for our unclaimed money to go to Women in Need NYC, a nonprofit that provides safe housing and services to homeless women.
Note that Lemonade isn't available everywhere in the US. As of May 2019, it's offered to residents of New York, California, Illinois, Texas, Rhode Island, New Jersey, Nevada, Ohio, Georgia, Pennsylvania, Maryland, Iowa, Wisconsin, Arizona, New Mexico, Michigan, Oregon, Arkansas, Connecticut, Indiana, Tennessee, Virginia, and Washington, DC.
In the end, my partner and I ended up going with Lemonade because it was so approachable. It didn't feel like we were taking the terrifyingly adult leap of insuring our belongings in case of an emergency. It felt like we were ordering dinner on Seamless - except instead of getting chicken and broccoli, we get reimbursed if a leak in our apartment damages our couch.