Lemonade Auto Insurance Review [2025]: Eco-Friendly Pay-Per-Mile Car Insurance

Lemonade is a car insurance company offering telematics-based and pay-per-mile insurance. It uses AI technology to process most claims and says that it handles 40% of them instantly.

Its unique features include offering extra policy discounts for electric and hybrid cars, planting trees to offset drivers' carbon emissions, and providing free roadside assistance and emergency crash response. Lemonade requires a smart app to determine how many miles you drive, so you must allow it to monitor your driving through location services to get the best rates.

I think Lemonade is a good option if it's available in your area and you frequently use public transit, work from home, or have a second car you don't drive much. However, it's currently only available in eight states. Additionally, if you drive a lot or don't want your driving behavior monitored, you'll probably be better off using a different car insurance company.

Lemonade pros and cons

How much does Lemonade auto insurance cost?

Lemonade's monthly rates start at $30 (based on your driving profile). If you sign up with the insurer, you'll pay a base price determined by the state you live in, the car you drive, your driving record and habits, and your chosen coverages. In addition to the base price, you'll pay a per-mile fee based on the month's mileage.

For example, let's say your base rate is $50. If your per-mile fee is $0.06 and you drive 1,000 miles during the month, that's an additional $60 added to your bill, or a total of $110. If you drive more than 1,000 miles during the next month, your insurance bill will increase. If you drive less, your bill should go down. However, your driving habits also determine how much you pay.

This can be a good way to save money on car insurance if you don't drive much, but it's generally not cost-effective if you have a long commute or aren't a cautious driver. You should consider your typical mileage and get a personalized quote from Lemonade to estimate costs.

To determine how competitive your potential costs through Lemonade might be, consider the national average monthly rates for liability-only and full coverage policies.

Is Lemonade car insurance good?

Company ratings:

• AM Best: Not rated
• J.D. Power claims satisfaction: N/A
• BBB: B- (Unaccredited)
• NAIC complaints: 10.09

Lemonade generally has low or missing financial and customer service ratings. A.M. Best, a company that assesses an insurance company's financial soundness, didn't rate Lemonade car insurance. However, Demotech, another financial analysis firm, gave Lemonade an A (Exceptional) financial rating.

The insurance company has an above-average number of complaints, according to the National Association of Insurance Commissioners (NAIC). Many of the best car insurance companies have a rating below 1.00 on the NAIC complaint index, generally indicating high customer satisfaction. However, Lemonade earned a 10.09 in 2024, meaning it has 10 times the number of complaints expected for a company of its size.

However, Lemonade earned a 4.1 out of 5 rating on Trustpilot with many positive customer reviews. And, it earned a B- rating from the Better Business Bureau (BBB) based on the number of complaints received and the time taken to respond to claims.

Discounts

Compared to other car insurance companies, Lemonade doesn't have many discounts. It uses its telematics program to help low-mileage drivers pay less than they would with a traditional insurance company.

However, it does have a few, including:

• Hybrid/EV: Insuring an eco-friendly vehicle with Lemonade could help you save more.
• Bundling: If you buy a Lemonade home, rental, term life, or pet health policy in addition to your car insurance, you'll automatically get a bundle discount.
• Planning: You'll see more savings if you sign up for Lemonade before your coverage starts.
• Using the app: When you run location services through the Lemonade app, you'll see more savings than if you turn this setting off.

In addition, Lemonade includes roadside assistance in all of its policies. Other companies generally charge extra for this benefit.

While these discounts are helpful if they apply to you, I wouldn't qualify (and I don't think most people who drive standard cars would) for at least two of Lemonade's limited discounts. Carefully compare quotes from Lemonade and other carriers to find the best coverage at the best price, including available discount options.

Discount	Does Lemonade have it?	GEICO	Progressive
Loyalty	No	No	Yes
Multi-policy/bundling	Yes	Yes	Yes
Multiple vehicle	No	Yes	Yes
Airbag	No	Yes	No
Anti-lock brakes	No	Yes	No
Anti-theft	No	Yes	Yes (select states)
Safe driver	Yes (through telematics)	Yes	Yes
Good student	No	Yes	Yes
Away-from-home student	No	Yes	Yes
New car	No	Yes	No
Pay in full	No	Yes	Yes
Automatic payments	No	Yes	Yes
GAP insurance	No	No	No
Senior	No	No	No
Military	No	Yes	No
Defensive driving course	No	Yes, varies by state	Yes, varies by state

Telematics

Lemonade uses telematics to monitor your driving habits through an app. You'll likely see a lower base rate if you have safe driving habits like avoiding speeding and hard braking, but your rate might increase if you aren't a careful driver. You'll need to have the Lemonade app on your phone and always allow location services to get the best rate.

Coverage

Lemonade offers standard liability, comprehensive, and collision coverages. As part of its collision and comprehensive coverage, the company may also reimburse you for expenses if your dog or cat is hurt or killed in a car accident. Note that guaranteed asset protection (GAP) insurance and rideshare insurance aren't available.

The insurer also provides some optional policies like extended glass coverage and temporary transportation coverage. With the latter coverage, Lemonade reimburses you for rideshare, bike sharing, or public transportation expenses for up to 30 days while you're waiting for a car repair or appraisal.

Here's a full list of Lemonade's coverage options.

• Bodily injury liability
• Property damage liability
• Collision coverage
• Comprehensive coverage
• Medical Payments (MedPay) coverage
• Uninsured/Underinsured driver bodily injury
• Uninsured/Underinsured property damage
• Extended glass coverage
• Temporary transportation coverage

Lemonade vs. competitors

Average pricing for Lemonade isn't available because it is so user-specific. However, based on your driving profile, the company says its pay-per-mile insurance starts at $30 monthly. For those who qualify, Lemonade's pricing may be significantly less than the national average of $193 for full coverage and $102 for liability-only coverage.

However, depending on your driving habits, mileage, and the policy types and amounts you choose, you may pay more than the national average and qualify for lower premiums through another carrier.

Lemonade vs. GEICO

While Lemonade has minimal discounts and coverage options, GEICO has more of both, including rental reimbursement and mechanical breakdown coverage. GEICO doesn't have pay-per-mile insurance, but it offers significantly below-average monthly rates for full and liability-only coverage, according to Insurify, costing just $114 and $52, respectively.

Geico also has an extensive list of discounts for military personnel, defensive driving course participants, and students. Plus, coverage is available in all states.

Lemonade vs. Progressive

If you're unsure about Lemonade but want to see how much telematics can lower your car insurance, check out Progressive. Its Snapshot program rewards good driving habits when you enroll and download the app or use a telematics device that you can plug into your car.

Progressive monitors when and how much you drive, any sudden changes (like braking hard or accelerating quickly), and your mobile phone use while driving. It develops your rate based on that data. The safer you drive, the lower your auto insurance rate is likely to be.

FAQs

Bottom line

I like that Lemonade is a good option for people who don't drive much and don't mind having their insurance carrier monitor their driving habits. However, it wouldn't be my first choice of car insurance — even though it's available where I live — simply because it doesn't have as many policy and discount options as some competitors.

As you look for ways to lower car insurance costs, thoroughly research any car insurance companies you consider before switching. Understand how the company calculates your rate, get multiple quotes, and read reviews on Trustpilot and the BBB to help you understand how a company handles customer problems.