Lemonade, a digital insurance company, has announced the launch of Lemonade Autonomous Car insurance, a new product designed specifically for self-driving vehicles, beginning with Tesla Full Self-Driving (FSD).
The new insurance offering introduces a different pricing model for autonomous driving, cutting per-mile rates by approximately 50% when FSD is engaged.
According to Lemonade, this reflects data indicating that driving risk is significantly reduced during autonomous operation. The company expects pricing to continue to improve as Tesla releases further FSD software updates, which are anticipated to enhance vehicle safety over time.
The product launch follows a technical collaboration between Lemonade and Tesla, granting the insurer access to vehicle data that had not previously been available.
This data is integrated into Lemonade’s usage-based risk prediction models, enabling the company to distinguish between autonomous and human driving. The models also assess risk based on factors such as the version of autonomous software installed, the precision of vehicle sensors, and other technical attributes.
Lemonade co-founder and president Shai Wininger said, “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.
“Our existing pay-per-mile product has given us something no traditional insurer has: a unique tech stack designed to collect massive amounts of real driving data for precise, dynamic pricing. Lemonade Autonomous Car was built on that foundation.”
The insurer has designed the product to accommodate intermittent use of FSD, as well as households that own a combination of Teslas and non-FSD vehicles from other manufacturers under a single policy. Customers may also qualify for additional discounts based on safe driving behaviour, as well as savings through bundling with Lemonade’s Homeowners, Renters and Pet insurance products.
Lemonade said the launch aligns with its broader strategy of applying AI to improve operational efficiency and pricing accuracy, with the intention of passing savings directly to customers. The company has stated its ambition to become the lowest-cost, best-experience insurance provider globally, positioning Lemonade Autonomous Car insurance as a step toward that goal.
“Teslas driven with FSD are involved in far fewer accidents,” Wininger said. “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.”
“Beyond the product announcement today, we’re also announcing our commitment to the Tesla community – the safer FSD software becomes, the more our prices will drop,” Wininger said.
The product will begin rolling out in Arizona on January 26, followed by Oregon approximately one month later.
Tesla owners will be able to receive a quote within seconds via the Lemonade app or through an online portal. Lemonade will also continue to offer its existing car insurance across multiple US states, including Arizona, California and Texas.
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