Hidden Fees

Hidden fees are insurance fees and surcharges that appear in the fine print and aren’t disclosed when you get a quote for your total premiums. It’s pretty sneaky (and not how we do things at Lemonade). 

What are hidden fees?  

Hidden fees can take many forms: those pesky ATM fees when you use your debit card at an out-of-network ATM; resort fees tacked on at the end of a vacation; or unexpected baggage fees for a carry-on. Even though these additional fees may not be a large amount of money, they add up. Most credit card companies, airlines, resorts, and insurers do disclose the fees, but they’re tucked away in the fine print, which most ordinary people don’t bother reading.

When you get an insurance quote, the insurer tells you upfront what you’ll pay in annual premiums, as well as your deductible. But with some insurers, there may be other fees that they don’t disclose.

Why do hidden fees matter?

Look, we get that you’re careful with your money. You might be the sort of person who got several insurance quotes, compared interest rates between checking accounts before settling on a bank, and shopped for the best foreign transaction fees before opening a credit card for that big European adventure. But all your careful work won’t matter if extra costs drive up the total cost. 

Here are some common hidden costs when it comes to car insurance policies:

  • Extra mileage fees. If you go with a low-budget insurer, or choose pay-as-you-go, and exceed the estimated annual mileage you thought you’d drive, they’ll charge extra fees.
  • Processing fees. Did you sign up for direct deposit for your monthly premiums? Some insurers could charge a processing fee. 
  • Lower coverage limits. Cheap premiums often means you have lower coverage limits. While not technically a fee, if you have lower coverage limits, you’ll pay more out-of-pocket if you’re in an accident. 
  • Paper statement fees. The digital revolution has come and gone, and most car insurance issuers prefer to send policy documents digitally. It saves them money on printing and postage. So if you’re old-school and want a paper statement, expect to pay for it. 

Regulators do require that credit card issuers, banks, insurers, and other companies in the financial industries disclose these hidden fees, but they don’t have to make them easy to find. Unless you want to review your policy documents with a magnifying glass, pick a trusted company that is known for fair play. 

The Lemonade difference

We’re all about transparency and clarity. When you apply for a quote via the Lemonade app, you’ll be able to set deductibles and limits, choose car insurance coverages to add, and see how this all affects your final price. 

Please Note: These definitions don’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade. They are intended for educational purposes only - they’re not meant to be used in lieu of professional legal or financial advice. We’ll do our best to keep them updated, but they may not always reflect current industry developments. Feel free to use the terms with attribution (friends don’t let friends plagiarize!)
Property and casualty insurance provided by Lemonade Insurance Company, 5 Crosby St., 3rd floor, New York, NY 10013. Life Insurance provided by North American Company for Life and Health Insurance®, Administrative Office, One Sammons Plaza, Sioux Falls, SD 57193.
Lemonade Insurance Agency, LLC (LIA) is acting as the agent of Lemonade Insurance Company and Lemonade Life Insurance Agency, LLC (LLIA) is acting as the agent of North American Company for Life and Health Insurance®. Both LIA and LLIA receive compensation based on the premiums for the insurance policies each sells. Further information is available upon request.
LLIA is a sub-producer of Bestow Agency, LLC. Life insurance quotes are provided by Bestow Agency, LLC dba Bestow Insurance Services in CA, who is the licensed agent. Term Life insurance policies are issued on North American Company for Life and Health Insurance® policy form LS181 and LS182, or state version including all applicable endorsements and riders. Products or issue ages may not be available in all jurisdictions. Limitations or restrictions may apply. Not available in New York. Our application asks about your lifestyle and health; your answers allow us to save you time and avoid offline medical exams.