Lemonade has officially launched its new Autonomous Car Insurance product, and for Tesla owners using Full Self-Driving, the savings could be substantial. As of today, Tesla drivers in Arizona can get 50% off their insurance cost for every mile driven with FSD (Supervised) engaged, marking one of the clearest financial incentives yet for using Tesla’s driver-assistance technology.
The idea is simple: if FSD is safer, insurance should be cheaper. Lemonade says its pricing is based on Tesla safety data showing that miles driven with FSD active have a 52% lower crash rate compared to manual driving. As a result, Lemonade is cutting the per-mile insurance cost in half whenever FSD is turned on. The more you drive using FSD, the less you pay overall, with plans starting as low as $30 per month.
Rather than a traditional flat premium, Lemonade’s Autonomous Car Insurance employs a usage-based model. Drivers pay a low fixed “parking” fee when the car isn’t being driven, plus a per-mile charge when it is. Those miles are automatically tracked through a direct connection to the vehicle, allowing Lemonade to distinguish between manual driving and FSD usage without any extra hardware or driver input.
The Arizona rollout follows Lemonade’s initial announcement of the product last week, when it revealed plans to offer half-off insurance rates for Tesla drivers who regularly use Full Self-Driving. For now, the program is limited to Teslas equipped with HW4 or newer, though Lemonade has already confirmed that Oregon will be next, with a launch scheduled for February 26. Additional states are expected to follow in the coming weeks and months.
Coverage-wise, nothing changes. Drivers get the same protections found in a standard auto insurance policy, including collision, comprehensive, liability, roadside assistance, and even roadside EV charging. Lemonade also supports Tesla-certified repair shops and offers automatic crash detection through its app.
The move comes as Tesla continues to show increasing confidence in Full Self-Driving, with recent FSD versions even allowing limited texting behind the wheel under certain conditions as the company works toward full autonomy. Tesla last week also officially started offering completely unsupervised Robotaxi rides in Austin using more advanced, internal FSD builds.
Interestingly, Lemonade’s approach puts it alongside Tesla’s own Insurance offering, which also factors FSD usage into premiums in states that allow it. With both companies now actively pricing around autonomy, insurance may be one of the first areas where safer self-driving directly translates into real-world savings.
