Lemonade says it will reduce per-mile insurance rates by about 50% for Tesla drivers when Tesla’s Full Self-Driving (FSD) system is engaged, using vehicle telemetry to distinguish between human-driven and FSD-driven miles. The insurer described the offering as “Autonomous Car Insurance,” built on its pay-per-mile model.
Lemonade’s collaboration with Tesla gives the insurer access to detailed telemetry that allows it to price miles differently depending on whether FSD is steering. Lemonade says the discounted rate reflects data indicating a lower accident rate during FSD operation.
The rollout is expected to start with Tesla drivers in Arizona, followed by an expansion to Oregon, according to various commentators. Some people highlighted that Tesla’s FSD is classified as a Level 2 driver-assistance system, which still requires driver supervision, and notes that the technology has faced regulatory scrutiny related to safety concerns.
Teslas driven with FSD are involved in far fewer accidents,” Wininger added. “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.
Lemonade
The move underscores how insurers are starting to rethink pricing as advanced driver-assistance systems become more widely used. Instead of treating all miles the same, Lemonade is effectively separating “human miles” and “software-assisted miles,” and assigning different per-mile rates based on how the vehicle is being operated.
This development aligns with predictions made years earlier (2016+) by technologists and insurance researchers who argued that advanced driver-assistance and autonomous systems would eventually force insurers to price risk based on software-controlled miles rather than human behavior.
As early as the mid-2010s, several industry analyses suggested that as vehicles gained the ability to distinguish human-driven and system-assisted driving, insurance pricing would shift toward usage- and mode-based models, with lower premiums for miles driven under automated control. The Lemonade–Tesla program reflects that long-anticipated transition from driver-centric underwriting to software-aware insurance pricing.
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