Apps & Consumer
Lemonade launches insurance for Tesla Full Self-Driving users
Lemonade is launching an insurance product for Tesla’s Full Self-Driving (Supervised) system, which the company claims will cut per-mile rates by approximately 50%.
Digital insurance company Lemonade announced on Wednesday that it is launching a new insurance product specifically for users of Tesla’s advanced driver assistance system, known as Full Self-Driving (Supervised). Through a technical collaboration with Tesla, Lemonade is leveraging vehicle telemetry data that was previously unavailable to traditional insurers. The company plans to train its own usage-based risk prediction models to determine when a driver is using the system or operating the vehicle themselves. Lemonade claims this integration will cut per-mile insurance rates by approximately 50%.
Lemonade is positioning the product, which it calls “Autonomous Car insurance,” as a way to price risk more accurately for AI-driven vehicles. Although the software does not currently make cars completely autonomous and drivers must remain ready to take over, the product is a bet on the future of self-driving technology. “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, co-founder and president of Lemonade. Wininger also noted that the company’s existing pay-per-mile product provides a unique tech stack designed to collect massive amounts of real driving data for precise, dynamic pricing, which traditional insurers lack.
The launch follows regulatory scrutiny of Tesla’s existing insurance offerings. In late 2025, Tesla was hit with an enforcement action by California’s Department of Insurance, a US state regulatory agency. The regulator accused Tesla and its partner, State National Insurance Company, of “egregious delays in responding to policyholder claims,” “unreasonable denials,” and engaging in “unfair claims settlement practices.” Tesla has denied these allegations.
The new insurance product is scheduled to launch in Arizona on January 26, followed by Oregon the following month. The rollout expands on Lemonade’s existing auto insurance footprint, which currently covers Arizona, California, Colorado, Illinois, Indiana, Ohio, Tennessee, Texas, and Washington. Lemonade claims that as the Full Self-Driving software becomes safer, its insurance prices will drop accordingly.
Why it matters
It’s one of the first products geared toward pricing insurance based on how software systems handle driving, and a sign that companies may look to create new lines of business as partial autonomy and true self-driving start to proliferate.