Lemonade is introducing insurance for Tesla Full Self-Driving customers

Digital insurance company Lemonade is launching a tool for users of Tesla’s driver assistance system, known as Full Self-Driving (Manager), which insurers promise will reduce mileage rates by “nearly 50%”.

This is one of the first things to manage the cost of insurance based on the performance of driving software, and it is a sign that companies can look to create new businesses as autonomy and true self-driving begin to increase.

Lemonade said Wednesday it was using “automobile telemetry data that was not available” because of a “technical agreement with Tesla,” though the insurance company declined to provide details. Lemonade says it will train its predictive models to determine whether a driver is using Full Self-Driving or driving the car, and the cost.

Lemonade is calling the new tool “Autonomous Car Insurance.” Tesla’s software doesn’t currently make cars autonomous, and drivers must be ready to take over at any time. But the deal is a bet that Tesla CEO Elon Musk will finally make good on his long-delayed promise to make his company a reality.

“Traditional insurers treat Tesla like any other car, and AI like any other driver. But a driver who can see 360 ​​degrees, doesn’t sleep, and acts in milliseconds is not like any other driver,” Shai Wininger, co-founder and president of Lemonade, said in a statement. “Our pay-per-mile product has given us something that no traditional insurance company has: a unique technology that is designed to collect large amounts of real-time data to drive accurate and flexible pricing.”

The new auto insurance policy will be introduced in Arizona on January 26, and in Oregon the following month. Lemonade says “the more secure FSD software is, the lower our prices are.” The current auto insurance that this company offers is available on the “most popular vehicles” in Arizona, California, Colorado, Illinois, Indiana, Ohio, Oregon, Tennessee, Texas, and Washington.

Tesla has offered its car insurance to customers for many years, although at the end of 2025 the company was affected by the actions of the California Department of Insurance (CDI). The automaker was accused, along with its partner State National Insurance Company, of “delays in responding to claims,” ​​”unreasonable denials,” and “unfair claims practices.”

Tesla has denied the allegations.