Insurance provider Lemonade Inc. has introduced a new policy offering about 50% lower per-mile rates for Tesla drivers using the Full Self-Driving system. The product, called Autonomous Car Insurance, starts in Arizona on January 26 and expands to Oregon in February. It relies on data from Tesla to assess reduced risk during FSD engagement.
On January 21, 2026, New York-based insurtech Lemonade announced its Autonomous Car Insurance, targeting Tesla Inc. owners who activate the company's Full Self-Driving (FSD) software. The policy cuts per-mile rates by approximately 50% when FSD is engaged, reflecting what Lemonade describes as significantly lower accident risk based on vehicle telemetry data shared through a technical partnership with Tesla.
This collaboration allows Lemonade's AI-driven models to differentiate between human-controlled and FSD-assisted driving, factoring in sensor precision and software versions for more accurate pricing. "Teslas driven with FSD are involved in far fewer accidents," said Shai Wininger, Lemonade's co-founder and president. "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 rollout begins in Arizona on January 26, with Oregon following in February. The policy supports intermittent FSD use and can cover mixed households with Teslas and other vehicles. Lemonade anticipates further rate reductions as Tesla issues software updates that improve safety.
However, FSD is classified as Level 2 autonomy, requiring constant driver supervision, and is under investigation by the US National Highway Traffic Safety Administration for traffic violations and crashes. Critics question the reliability of Tesla's safety data, which lacks peer review. Traditional insurers remain cautious, often treating Teslas like standard high-value vehicles without specific FSD adjustments.
Tesla offers its own insurance in several states with up to 10% discounts for FSD use in certain areas, but Lemonade's approach marks a bolder bet on the technology's potential to lower risks amid evolving industry debates over autonomous vehicle coverage.
