Lemonade Insures Tesla’s Full Self-Driving Feature
▼ Summary
– Lemonade is launching a new “Autonomous Car insurance” product for Tesla’s Full Self-Driving (Supervised) system, promising to cut per-mile rates by approximately 50%.
– This is one of the first products to price insurance based on how software systems drive, signaling a potential new business line as autonomous technology spreads.
– The product leverages previously unavailable Tesla vehicle telemetry data and uses Lemonade’s own models to determine when FSD is active for dynamic pricing.
– The insurance will launch first in Arizona and Oregon, with Lemonade claiming prices will drop further as the FSD software becomes safer.
– Tesla’s own insurance offering has faced regulatory action in California, being accused of claim delays, unreasonable denials, and unfair settlement practices.
Lemonade, a digital insurance provider, is introducing a specialized policy for drivers using Tesla’s Full Self-Driving (Supervised) technology. This new offering, branded as “Autonomous Car insurance,” promises to reduce per-mile rates by roughly half. It represents a significant shift toward pricing coverage based on the performance of advanced software systems, signaling how insurers might adapt as vehicles with partial and full autonomy become more common.
The company announced it has entered a technical partnership with Tesla, granting it access to previously unavailable vehicle telemetry data. Lemonade plans to use this data to train its own risk prediction models. These models will distinguish between periods when the Full Self-Driving system is engaged and when the human driver is in control, adjusting the insurance price dynamically based on that usage.
It is important to note that Tesla’s current system is not fully autonomous; drivers must remain attentive and ready to intervene. However, Lemonade’s product is clearly a wager on the future, betting that CEO Elon Musk will eventually deliver on the long-promised goal of complete vehicle autonomy.
“Traditional insurers treat a Tesla like any other car, and AI like any other driver,” said Shai Wininger, Lemonade’s co-founder and president. “But a driver who can see 360 degrees, never gets drowsy, and reacts in milliseconds isn’t like any other driver.” He added that the company’s existing pay-per-mile infrastructure provides a unique technological foundation for collecting vast amounts of real-time driving data, enabling this precise, behavior-based pricing.
The new insurance product will first launch in Arizona on January 26, followed by Oregon the next month. Lemonade asserts that its pricing will continue to fall as the Full Self-Driving software’s safety improves. The insurer’s standard auto coverage is already available for many popular vehicle models in ten states, including California, Texas, and Illinois.
This move comes as Tesla faces challenges with its own in-house insurance program. In late 2025, California’s Department of Insurance took enforcement action against the automaker and its partner, State National Insurance Company. The regulators alleged serious issues, including “egregious delays in responding to policyholder claims” and “unreasonable denials.” Tesla has disputed these allegations.
(Source: TechCrunch)
