Is Lemonade Legitimate Pet Insurance?

In a word, yes! Lemonade is legitimate pet insurance. So if you’ve recently added a new pet to your family, Lemonade Pet Insurance is well worth your consideration.

Lemonade uses artificial intelligence (AI), machine learning, and a flat fee profit model. These things allow for comprehensive coverage options at an affordable price, as well as allows Lemonade to give back unused premiums to a nonprofit you’ve selected. Sounds pretty good, doesn’t it?

A brown and white spaniel laying on a striped run looks pensively to the side — Photo by Marisa Fahrner

But Is Lemonade Pet Insurance Any good?

Founded in 2015, and offering renters and homeowners insurance, Lemonade expanded to pet insurance in 2020, followed by term life insurance and car insurance in 2021. A fully licensed and regulated insurance company, Lemonade underwrites, prices, and sells policies, in addition to processing and paying claims. They’re growing, but they aren’t available in every state yet. You can check the status of your state here.

Some of the largest reinsurers in the world, like Swiss Re, Munich Re, and Hannover Re, provide reinsurance for Lemonade. Additionally, Demotech Inc. has given Lemonade a Financial Stability Rating® of A-Exceptional.

Though relatively new to the insurance playing field, Lemonade is definitely legitimate pet insurance you should feel good about.

How Lemonade Pet Insurance Keeps Costs Low

Lemonade has eliminated the traditional insurance agents and brokers in favor of chat bots and machine learning. They sell policies online via their website or mobile app. Insureds manage their policies, get help from their team, and file claims online too. This model provides for fast and efficient claims processing with about 1/3 of Lemonade’s claims being paid in just seconds from being filed. It keeps overhead for the company low, which translates into lower premiums for you, and frees up their human team to manage emergencies and more complex claims.

Some might see all this artificial intelligence as a con, but once I saw the difference in Lemonade’s premiums, it is certainly something I can get over. As a matter of reference, I sent multiple questions to Lemonade regarding their pet insurance coverage while researching this post. Each time, their team provided answers to me in less than 24 hours.

A Boston Terrier pup laying in the grass, looking up at the camera — Photo by Melissa Jansen Van Rensburg

Additionally, Lemonade makes money using a flat fee model, meaning they earn the same flat fee out of your premium as profit, regardless of the outcome of any claims you file. After paying claims and expenses, Lemonade donates the remainder of unused premiums to charities selected by insureds. Lemonade is aPublic Benefit Corporation and a Certified B Corp. In 2021, Lemonade donated $2,303,381 to over 65 nonprofits around the world. How cool is that?! It’s called the Lemonade Giveback and you can read more about it here.

If all of this wasn’t enough to convince you that Lemonade is legitimate pet insurance with affordable premiums, they also offer discounts for insuring multiple pets, or purchasing multiple lines of insurance. And if you pay your premium annually instead of monthly, there’s a discount for that too.

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What Does Lemonade Pet Insurance Cover?

Lemonade Pet Insurance has a number of policy options which impact your coverage, as well as the price you pay for it. Since it can be daunting to determine if a policy will fit your needs, let’s break it down…

A base Policy To Cover Accidents and illness

To begin with, Lemonade Pet Insurance offers a base policy to cover accidents and illness. This is stuff like “cancer, infections, UTIs, diabetes, cuts, broken bones”. For covered accidents or illness, they will reimburse for diagnostics, procedures, and medications necessary for treatment.

Lemonade Pet Insurance Base Policy Basics

Diagnostics

Diagnostics for a covered accident or illness, such as blood tests, urinalysis, x-rays, MRIs, lab work, CT scans, and ultrasounds.

Procedures

Outpatient procedures, specialty care, and emergency care, as well as hospitalizations, and surgery to treat a covered accident or illness.

Medications

Prescription medications and injections required for the treatment of a covered accident or illness.

Pre-Existing Condition Exclusions

Not different from other pet insurance coverage, Lemonade does not cover pre-existing conditions. I recommend obtaining pet insurance as soon you add a new furry family member, so that their medical record is as free as possible from issues that would be considered pre-existing conditions.

Waiting Periods For Coverage

Most pet insurance policies have a waiting period before coverage begins. After all, a waiting period helps manage folks trying to sneak in a pre-existing condition as a “new” thing, as responsible pet parents wouldn’t delay needed treatment for accidents or illness.

Lemonade Pet Insurance has the following waiting periods:

2 days for accidents
14 days for illnesses
6 months for cruciate ligament events

Co-insurance, Deductible, Payout Limits

Lemonade Pet Insurance offers flexibility to choose your co-insurance level, your deductible, as well as your annual payout limit. These choices directly impact the price of your policy and consequently, the amount you’ll have to pay toward a covered accident or illness.

For An Eligible Accident or Illness Claim

Co-insurance

This is the percentage of a covered expense that Lemonade Pet Insurance will pay. You’ll choose from 70%, 80%, or 90% co-insurance.

Deductible

The annual deductible is a flat fee paid paid by you over one or more claims each year. You’ll choose a deductible from $100, $250, or $500.

Pay Out Limit

This is the maximum amount Lemonade Pet Insurance will pay toward eligible claims each year. You’ll choose a pay out limit of $5k, $10k, $20k, $50k, or $100k per year.

Generally speaking, I would choose 90% co-insurance, a deductible of $250, and $100k per year pay out limit, as it works best for me. I have paid for veterinary care in the past exceeding some of the lower limits, and as a result, I feel more comfortable with the highest limit. In my initial research quotes for coverage, the premium difference between these pay out limits appears negligible for the increased benefit.

How Lemonade Pet Insurance Reimbursement Works

In my experience with eligible claims, most insurance companies subtract your deductible amount first, with the remainder divvied up by your co-insurance amount. However, Lemonade Pet Insurance does the opposite. Every eligible claim is divided up by your co-insurance amount first – their portion and your portion. Then, your deductible is subtracted from their portion.

A white dog with black ears laying with head on paws, staring intently — Photo by Ylanite Koppens

Math is hard, but here is a simple scenario to make sense of it. You haven’t filed any claims this year, your deductible balance is $0, and your vet prescribes a $100 medication for a covered illness. If you have 80% co-insurance, this means Lemonade pays $80 (after you meet your deductible), and you pay $20. The deductible owed is subtracted from Lemonade’s $80 share, not the full $100 bill. In other words, the 20% portion of each bill is always yours to pay, and it never counts toward the deductible.

Consequently, other companies will have you think this is very bad, and is going to cost you a lot more money, or that it somehow makes Lemonade Pet Insurance less legitimate. Don’t let this scare you. Technically, this method will cost you more. But, depending on the co-insurance level and deductible amount you’ve selected, it will only cost $10 to $150 more per year, regardless of whether your claims are $500 or $50,000. With Lemonade’s comparatively affordable premiums, this extra cost has little impact.

Optional Coverage Add-Ons

Lemonade Pet Insurance offers a number of optional coverage add-ons for things not covered in the base policy. Of course, I have pretty strong opinions on which ad-ons to purchase, and which you should pass on. These optional coverages include:

Physical Therapy for Accidents & Illness
Vet Visit Fees for Accidents & Illness
Preventive Care
Preventive+ Care
Dental Illness
End of Life & Remembrance

Consider Accident & Illness Ad-On Coverages from lemonade

Lemonade’s base policy does not cover any physical therapy treatments needed as a result of an accident or illness without the Physical Therapy Add-On. Without a doubt, this add-on is a must have! Your coverage is not complete without it.

It includes treatments like acupuncture, electro-acupuncture, e-stim therapy, chiropractic care, cryotherapy, gait training, heat therapy, joint mobilization, laser therapy, range of motion exercises, treadmill therapy, hydrotherapy, stretching, therapeutic exercises, and therapeutic ultrasound therapy. These treatments are payable up to your selected annual base policy limit.

Lemonade’s base policy does not cover the vet visit fee related to accidents or illness. The Vet Visit Fee Ad-On provides that coverage up to your selected annual base policy limit. Certainly, it would be very nice to have if you end up dealing with a chronic issue that requires multiple vet visits, or a multiple night hospital stay.

It’s kind of a toss up. If the extra expense for this ad-on doesn’t make you uncomfortable, go for it. Or just set a little money aside so you can cover the extra vet visit fees should you need it.

Ad-On Options for Preventive Care

All pets should be provided with basic preventive health care. It’s just part of the deal when you add a pet to your family. Lemonade Pet Insurance doesn’t cover any preventive care unless you purchase one of these ad-ons.

The deductible is not required for preventive care items, and your reimbursement is based upon your co-insurance. Additionally, there is an annual limit for each covered item (which varies slightly based upon your co-insurance). That is to say your reimbursement is not based upon actual cost.

Compare your veterinarian’s actual charges to the per item limits. You’re responsible for the ad-on’s extra premium, any charge amount exceeding the defined limit, as well as your share of the limited figure, with Lemonade paying their co-insurance amount. All things considered, the cost vs. benefit of a preventive care package generally isn’t worth it, in my opinion. I prefer to just plan these expected expenses into my pet care budget.

Lemonade’s Ad-Ons for Preventive Care

The Preventive Care Ad-On includes limited annual coverage for 1 wellness exam, 1 fecal or internal parasite test, 3 vaccines, 1 heart worm or FeLV/FIV test, and 1 blood test.

Preventive+ Care includes everything listed under the Preventive Care Ad-On, as well as limited annual coverage for routine dental cleaning and flea/tick or heart worm medication.

Other Ad-Ons I would skip

Some of Lemonade’s optional ad-ons are only offered if your pet is of a certain younger age at enrollment. However, if they are offered, I would feel reasonably comfortable skipping these coverages.

Pass on these Optional Ad-On Coverages

The base policy does not cover dental illness; only dental accidents. This ad-on provides coverage for periodontal disease, extractions, tooth restoration, stomatitis, gingivitis, dentigerous cyst(s), etc. It has a $1,000 annual limit.

If you take care of your pet’s teeth, and follow your veterinarian’s dental preventive care recommendations (i.e. regular cleanings, which can be expensive), it is less likely your pet will experience typical dental illnesses. And if you don’t follow your veterinarian’s recommendations, your dental illness claim may be denied for that reason.

Lemonade offers an ad-on for euthanasia, cremation, and memorial items. The deductible is not required and co-insurance does not apply. Items are 100% reimbursed up to $500.

The cost for the ad-on is relatively negligible. However, if your pet lives a long and happy life, you’re better off just setting aside some money for this.

Would I purchase Lemonade Pet Insurance?

If you’re read my previous pet insurance posts on Trupanion and Healthy Paws, you know I’m a huge advocate for insuring your pets. Currently, I insure my girls with Healthy Paws. I have zero complaints on the service or coverage, but over the years, the premiums have definitely continued to rise.

Comparatively, if I were to insure them with Lemonade (Base Policy, plus Physical Therapy ad-on, same 90% coinsurance and $250 annual deductible as Healthy Paws, maxing out Lemonade’s annual limit at $100k vs. Healthy Paws unlimited), I would be paying a lot less money! Lemonade is 33-39% less for each policy, and that’s before their multi-pet discount.

Three Labradors sitting in the grass along the Charleston harbor

Alas, each of my dogs has at least one chronic issue currently covered by Healthy Paws, so I’m not in a position to make a switch. But I have to tell you, the next time I’m in the market for a new pet insurance policy, I would not hesitate to choose Lemonade Pet Insurance as legitimate pet insurance with extremely affordable premiums, and a giveback program I feel good about!