Digital insurer Lemonade said it is launching a new auto insurance product designed for users of Tesla’s Full Self-Driving (Supervised) driver assistance system, promising to cut per-mile rates by about 50% when the software is engaged.
The offering, which Lemonade is calling “Autonomous Car insurance,” is among the first insurance products to explicitly price risk based on how driving software performs versus a human driver. It signals a shift by insurers toward new models as partial autonomy becomes more widespread.
Lemonade said it is leveraging vehicle telemetry data made available through a technical collaboration with Tesla, though it declined to provide details. The insurer said it will train its own usage-based risk models to determine when a vehicle is operating under Full Self-Driving (Supervised) and when a human is in control, adjusting pricing accordingly.
“Traditional insurers treat a Tesla like any other car, and AI like any other driver,” said Shai Wininger, co-founder and president of Lemonade. “But a driver who can see 360 degrees, never gets drowsy, and reacts in milliseconds isn’t like any other driver.”
Tesla’s Full Self-Driving software does not make vehicles fully autonomous, and drivers must remain attentive and ready to take control at all times. Lemonade’s product nevertheless reflects a bet that continued improvements in advanced driver assistance systems will translate into lower accident risk over time. The company said that “the safer FSD software becomes, the more our prices will drop.”
The new insurance product is scheduled to launch in Arizona on Jan. 26, with Oregon to follow in February. Lemonade already offers auto insurance in several U.S. states, including California, Texas and Washington, covering what it describes as the most popular vehicle models.
Tesla has offered its own branded insurance for several years. In late 2025, however, the automaker and its partner, State National Insurance Company, faced an enforcement action by California’s Department of Insurance over alleged delays and unfair practices in handling claims.
Lemonade said its existing pay-per-mile product has helped it build the data infrastructure needed to support dynamic, software-aware pricing, positioning the company for a future in which autonomy plays a larger role in everyday driving.