Lemonade Launches Autonomous Car Insurance for Tesla Owners with FSD
Lemonade has officially launched its new Autonomous Car Insurance product, offering substantial savings for Tesla owners using Full Self-Driving technology. The insurance company is offering a 50% discount on insurance costs for every mile driven with FSD (Supervised) engaged in Arizona, providing a clear financial incentive for utilizing Tesla’s driver-assistance technology.
The concept is straightforward: if FSD is proven to be safer, insurance rates should be lower. Lemonade bases its pricing 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 activated. The more a driver uses FSD, the lower their overall insurance cost, with plans starting as low as $30 per month.
Unlike traditional flat premiums, Lemonade’s Autonomous Car Insurance utilizes a usage-based model. Drivers pay a low fixed “parking” fee when the car is not in use, along with a per-mile charge when the vehicle is on the road. The miles are automatically tracked through a direct connection to the vehicle, allowing Lemonade to differentiate between manual driving and FSD usage without the need for additional hardware or input from the driver.
The Arizona rollout follows Lemonade’s recent announcement of the product, where it introduced plans to offer half-off insurance rates for Tesla drivers who regularly use Full Self-Driving. Initially, the program is limited to Teslas equipped with HW4 or newer technology. However, Lemonade has confirmed that Oregon will be the next state to launch the program on February 26, with additional states expected to follow in the near future.
In terms of coverage, Lemonade’s Autonomous Car Insurance offers the same protections as a standard auto insurance policy, including collision, comprehensive, liability, roadside assistance, and even roadside EV charging. The company also supports Tesla-certified repair shops and provides automatic crash detection through its app.
This initiative comes as Tesla demonstrates increasing confidence in Full Self-Driving technology, with recent FSD versions allowing limited texting while driving under specific conditions. Tesla has also begun offering unsupervised Robotaxi rides in Austin using more advanced, internal FSD builds.
Interestingly, Lemonade’s approach aligns it with Tesla’s own Insurance offering, which also factors FSD usage into premiums in states where it is permitted. With both companies now incorporating autonomy into their pricing strategies, insurance may become one of the first areas where safer self-driving translates into tangible savings for consumers.