The 50 percent premium reduction for Tesla FSD miles reflects the “significantly reduced risk during autonomous operation” of the vehicle, the insurance company said.
“Lemonade expects further reductions as Tesla releases FSD software updates, which are anticipated to make the cars even safer over time,” it said.
In North America, a Tesla with FSD drove 5.1 million miles before a collision, making it safer than a Tesla driven manually with no active safety features, which had a collision every 971,994 miles.
The lower insurance offering is the result of Tesla granting the insurance company access to previously unavailable vehicle data, according to Lemonade.
The dataset is fed into Lemonade’s usage-based risk prediction models to identify autonomous driving from human driving, predict risks based on autonomous software versions installed in the vehicle, and perform other similar analyses.
Lemonade claims its solution enables the “most precise usage-based pricing” for Tesla FSD. In addition, customers who are deemed to engage in safe driving behavior can unlock additional discounts.
Lemonade plans on launching the Autonomous Car Insurance offering in Arizona on Jan. 26, followed by Oregon the next month. Tesla FSD is the first to be covered under the plan.
“Traditional insurers treat a Tesla like any other car, and AI like any other driver,” Shai Wininger, co-founder of Lemonade, said.
“But a car that sees 360 degrees, never gets drowsy, and reacts in milliseconds can’t be compared to a human.
“Our existing pay-per-mile product has given us something no traditional insurer has: a unique tech stack designed to collect massive amounts of real driving data for precise, dynamic pricing.”
Tesla’s FSD feature has previously come under scrutiny from authorities.
Electric Versus Gas Car Insurance
Earlier, an August 2025 report by insurance company Insurify found that electric vehicles cost 49 percent more to insure than gas-powered cars.While an EV driver faced an average insurance cost of $4,058 per year, a gas-powered vehicle owner paid $2,732.
“The higher cost of repairing and replacing EVs can account for much of that difference, since premiums reflect the risk and expense of paying out claims,” the report said.
“EV adoption and related factors, like charging infrastructure, incentives, and the availability of specialized mechanics, also affect insurance costs by influencing maintenance and ownership costs.”
The report cited Tesla’s Model X and Model 3 as the most expensive EVs to insure. In the first quarter of 2025, the average claims frequency for a repairable, collision-damaged EV was 3.12 percent.
While the claims frequency for Model X was slightly higher at 3.68 percent, Model 3 had a far higher rate at 26.95 percent, which indicated to insurers that this model required frequent repairs, Insurify said.
