Lemonade slashes Tesla full self-driving insurance rates by 50%

Digital insurer Lemonade has launched Lemonade Autonomous Car insurance, a first-of-its-kind product tailored for self-driving vehicles, starting with Tesla cars using Full Self-Driving (FSD).

According to a company announcement, the new offering reduces per-mile insurance rates by around 50% when FSD is engaged, according to Business Wire report.

The product leverages a technical collaboration with Tesla, giving Lemonade access to vehicle data that feeds its usage-based risk prediction models.

These models distinguish between human and autonomous driving and adjust pricing based on software version, sensor precision, and other vehicle metrics.

Shai Wininger, co-founder and president of Lemonade, said, “A car that sees 360 degrees, never gets drowsy, and reacts in milliseconds can’t be compared to a human.”

The insurer also highlighted that its existing pay-per-mile system provides the tech infrastructure to collect driving data for precise, dynamic pricing, the report said.

Lemonade supports intermittent FSD use, households with both Tesla and non-FSD vehicles, and additional discounts for safe driving or bundling with its renters, homeowners, and pet insurance. The rollout begins in Arizona on January 26 and Oregon a month later, with quotes available via the Lemonade app or online.

The move reflects Lemonade’s broader strategy of using AI to improve pricing accuracy and operational efficiency, passing savings to customers while expanding its digital-first insurance offerings across the US and Europe.