Lemonade’s Autonomous Car Insurance Cuts Tesla FSD Rates by Half—But Can It Keep Up With Elon’s Promises?

Lemonade is slashing Tesla Full Self-Driving (FSD) insurance rates by half, leveraging vehicle telemetry data in a bid to redefine risk assessment for autonomous vehicles.

The new product, launching in Arizona on January 26 and Oregon in February 2025, marks a departure from traditional insurers’ static models.

"Traditional insurers treat a Tesla like any other car, and AI like any other driver. But a driver who can see 360 degrees, never gets drowsy, and reacts in milliseconds isn’t like any other driver," said Shai Wininger, Lemonade co-founder.

The company declined to specify technical collaboration details with Tesla but confirmed access to "vehicle telemetry data previously unavailable" to refine risk calculations.

"Traditional insurers treat a Tesla like any other car, and AI like any other driver. But a driver who can see 360 degrees, never gets drowsy, and reacts in milliseconds isn’t like any other driver."

While Lemonade’s model personalizes rates based on FSD performance, Tesla’s own insurance rollout has faced scrutiny.

California regulators issued an enforcement action in late 2025 over "egregious delays" and "unfair claims settlement practices." This highlights the regulatory risks of integrating autonomous systems into existing insurance frameworks.