Your Renters Insurance is a Rip-Off

At first glance renters insurance seems like another one of those “nice-to-have” insurance products. Sure fires, pipe bursts and burglaries occur, but what are the chances that they actually happen to you? I was probably guilty of this very same thought process before I moved into NYC. After all, when your paying an arm and a leg in rent every month, you assume that the building and apartment will be in top notch shape.

Oh, how ignorant I was…


If you’ve apartment hunted in NYC before then you know how rushed the process can be. Demand is off the charts. Therefore, you typically only get one chance to view the apartment before signing away your fate in the form of a 12-month lease. So, when me and my roommates first came across this spacious 3-bedroom apartment, we knew we had to act quick. Sure, it wasn’t perfect, the building was a bit old and it had some wear and tear, but all in all it seemed like a solid find.

Fast forward 3 months and we had a waterfall in our living room. Sound dramatic? Please take the time to load the video below:

This became a regular occurrence for us. Every couple of weeks we would be blessed with the flow of the rare and spectacular Manhattan Waterfall. Our super was adamant that the pipes were in good shape. In fact, he even opened the ceiling up himself a few times to personally check things out. While the effort was appreciated, it certainly was not fruitful. The mystery of the Manhattan Waterfall continued on…

Eventually we would come to find out that the Manhattan Waterfall was a result of the unique bathing habits of our upstairs neighbor. Apparently instead of using the shower, she would fill the bath tub up with water and use a cup to splash it all over her body. This resulted in a flooded bathroom every couple of weeks. This bathroom flood would slowly seep through the molding and drip down through our ceiling.

Anyway, back to the story. So being that the Manhattan Waterfall would strike at random, I began to really worry about my belongings. What if the waterfall turned on while we were at work and flooded the entire apartment? What if the entire ceiling came down and put our apartment 2 feet under water?

Among other things, renters insurance provides coverage for your belongings (clothes, electronics, etc.) against damage and theft. So hypothetically if your ceiling collapsed and soaked your clothes, computer, and every other valuable item in sewage water, you would receive some money to replace them.

I already had a renters insurance policy because our landlord required it. Therefore, I figured it would be a great time to re-read this insurance policy and gain an understanding of exactly what would be covered in the event of an indoor monsoon. This is where my frustration began.

If you have ever read an insurance policy from beginning to end, then you know my pain. It is full of legal terms, exclusions and clauses. I worked in the insurance industry and I still found my head spinning trying to decode if I was financially secure against the Manhattan Waterfall. Eventually my frustration boiled over. Why did it have to be so complicated? There had to be a better way…

I remembered hearing about this new start-up called Lemonade. They apparently offered renters and homeowners insurance in a new and modern way. So, I downloaded their app and began the signup process. I was immediately blown away with how easy and transparent everything was. I love this company for many reasons, but the transparency and straight forward coverage explanations is what drew me in. I became a Lemonade customer that day and have not looked back since.

So what about the Manhattan Waterfall? Our unique upstairs neighbor eventually moved out and the waterfall went dry. Our ceiling never collapsed and luckily my belongings were left unharmed throughout the whole saga. Nonetheless, this whole experience taught me a valuable lesson about renters insurance and it’s providers.

Why you Should Make the Switch to Lemonade

Note: At the time of this writing Lemonade is still expanding and therefore is not available in all 50 states. Check their website to see if your location is currently covered.

The title of this blog boldly claims that your renters insurance is a rip-off. While this may be a bit extreme, I truly believe Lemonade provides a unique insurance experience. Here’s why:

1. Low Price

Your monthly premium will vary depending on your coverage plan, but I was able to secure sufficient coverage for all of my belongings for $5 per month! Using technology Lemonade is able to operate with less costs than a traditional insurance company. This cost saving is reflected in their extremely competitive premium rates.

2. Easy to Use

Signing up for Lemonade takes about 2 minutes. All you need to do is download the app and answer a few questions via a chat bot. If you already have renters insurance, then Lemonade will even handle the switch for you. That’s right, they’ll notify your other insurance provider and take care of everything for you. A demo of the sign-up experience can be viewed on Youtube:

3. Transparency, Transparency, Transparency

No more sifting through confusing insurance policy forms. Your coverage will be explained to you using plain English and some nice little pictures. Lemonade is very clear about what is covered, what is not covered and what optional coverages are available.

4. The “Giveback”

In my opinion this is one of the cooler things Lemonade does. Buying insurance is always a tough pill to swallow. If nothing goes wrong, then you feel like you wasted your money and the rich insurance company just got richer. Lemonade does something different. Rather than keeping the unused premiums as profit, they donate it to a charity of your choosing.

5. Rapid Claims Payments

Luckily the Manhattan Waterfall never soaked my belongings. But if it had, getting reimbursed would have been a breeze. If you have ever filled out an insurance claim form, then you know how crazy this sounds. With Lemonade all you need to do is send the chatbot a video explaining what happened. In most cases, your claim will be instantly approved, and you will be reimbursed on the spot. In more complex situations, you may need to provide additional documentation, but the process is still far superior to the typical insurance claim experience.

6. Backed by Reinsurance

Reinsurance is usually a foreign term for people outside of the insurance industry. It is basically insurance for insurance companies. Think of reinsurance as a safety net. So, if all of Lemonade’s policy holders were to have claims in the same year, Lemonade would not go out of business. They would be protected from financial ruin by the reinsurance.


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