Insurer Lemonade has introduced a new product offering up to 50% lower rates for Tesla vehicles using Full Self-Driving (FSD) technology. This pay-per-mile policy undercuts Tesla's own insurance discounts and stems from a data-sharing partnership with the automaker. The move highlights growing confidence in assisted driving features amid ongoing safety debates.
Lemonade, a digital insurance provider, announced its "Autonomous Car Insurance" on January 22, 2026, targeting Tesla owners who activate FSD. The policy reduces per-mile rates by about 50% exclusively for miles driven with FSD engaged, enabled by direct access to Tesla's vehicle telemetry data through a technical collaboration.
Shai Wininger, Lemonade's co-founder and president, explained the rationale: "Traditional insurers treat a Tesla like any other car, and AI like any other driver. But a car that sees 360 degrees, never gets drowsy, and reacts in milliseconds can’t be compared to a human." The system analyzes driving data in high resolution, distinguishing FSD usage from manual driving and considering factors like the installed FSD software version and vehicle sensor precision. Wininger added to Reuters that this includes monitoring "every minute, every second that you drive your car."
Lemonade committed to adjusting rates downward as FSD improves: "The safer FSD software becomes, the more our prices will drop," with a long-term goal of insuring such vehicles for "almost free."
In comparison, Tesla Insurance, launched about a year earlier, provides a maximum 10% discount for FSD use on at least 50% of miles, applying only to select coverages and potentially yielding less than 10% overall savings. Tesla's broader model relies on a Safety Score assessing behaviors like hard braking and late-night driving, with average drivers saving 20% to 40% and top scorers up to 60%. However, the score weighs miles driven without Autopilot or FSD active, which could limit benefits for frequent FSD users.
Both offerings assume FSD enhances safety under supervision, though evidence is contested. Tesla's late-2025 safety report claims fewer crashes, but it lacks peer review, and the National Highway Traffic Safety Administration (NHTSA) is probing incidents involving FSD. Wininger acknowledged: "These things are not fully autonomous yet and they require a certain intervention level... 50% off... is what we believe the improvement is of you as a driver using this technology."
This development signals insurers' increasing engagement with autonomous tech, potentially reshaping premiums as capabilities evolve.
