Image: Tesla
U.S.-based digital insurer Lemonade is making a bold bet on Tesla’s Full Self-Driving technology, announcing a new insurance product that slashes rates for Tesla drivers by roughly 50% when FSD is engaged.
According to the company, it is launching what it calls “Lemonade Autonomous Car” insurance, a first-of-its-kind offering built specifically for self-driving vehicles, starting with Tesla. The key hook is simple: when FSD is steering, per-mile insurance rates drop by about half, reflecting data that Lemonade says shows a significantly lower risk profile during autonomous operation.
“Traditional insurers treat a Tesla like any other car, and AI like any other driver,” said Lemonade co-founder and president Shai Wininger. “But a car that sees 360 degrees, never gets drowsy, and reacts in milliseconds can’t be compared to a human.”
The product is the result of a deeper technical collaboration with Tesla, giving Lemonade access to vehicle-level data that was previously unavailable to insurers. That data feeds into Lemonade’s usage-based pricing models, allowing it to distinguish between human-driven and FSD-driven miles, while also factoring in the specific FSD software version and sensor precision installed in the car.
“Teslas driven with FSD are involved in far fewer accidents,” Wininger added. “By connecting to the Tesla onboard computer, our models are able to ingest incredibly nuanced sensor data that lets us price our insurance with higher precision than ever before.”
The move comes as Tesla continues to signal growing confidence in Full Self-Driving. Recent FSD versions have even enabled limited hands-free and eyes-off scenarios under specific conditions, as the company works toward unsupervised autonomy. Elon Musk has also reiterated that current AI4-equipped Teslas won’t need hardware upgrades to access unsupervised FSD, which Tesla has already begun testing with its Robotaxi fleet in Austin, when it launches.
Lemonade’s announcement also highlights increasing competition in Tesla-focused insurance. Tesla’s own Insurance product already factors FSD miles into premiums in most states. Tesla Insurance recently expanded to Florida, its first new state in more than three years, with more expansions on the way.
Lemonade Autonomous Car insurance will begin rolling out in Arizona on January 26, followed by Oregon a month later. “Beyond the product announcement today, we’re also announcing our commitment to the Tesla community – the safer FSD software becomes, the more our prices will drop,” Wininger concluded.
