Lemonade's insurance recipe makes some consumers wince

J.D. Power: Lemonade’s recipe for stratospheric growth has left a bitter taste in the mouths of some insurance customers.

Lemonade, the New York City-based InsurTech, made a splash in the insurance industry this year, first becoming the best IPO debut of the year after gaining 140% on its first day of trading in July, and now earning the top spot among renters insurance providers in J.D. Power’s annual U.S. Home Insurance Study in its first year of eligibility.

Both achievements are nothing short of remarkable for a 5-year-old start-up, but those headline achievements belie some deeper shortcomings that could stunt the growth potential of this Wall Street darling. Ultimately, Lemonade’s long-term success will be determined by its ability to convert renters insurance customers to homeowners’ insurance policyholders.