Shares of Lemonade Inc (NYSE:LMND) climbed 6.3% on Wednesday after the digital insurer introduced a new policy designed specifically for Tesla vehicles equipped with Full Self-Driving (FSD) technology.
The company said the product is the first of its kind and will reduce per-mile insurance rates by roughly 50% when Tesla’s FSD system is active. The pricing reflects data indicating a materially lower risk profile during autonomous driving. Lemonade developed the offering through a technical collaboration with Tesla, which provided access to vehicle data that traditional insurers do not typically use.
“Traditional insurers treat a Tesla like any other car, and AI like any other driver,” said Shai Wininger, co-founder and president of Lemonade Inc. “But a car that sees 360 degrees, never gets drowsy, and reacts in milliseconds can’t be compared to a human.”
The new product builds on Lemonade’s existing pay-per-mile platform, which gathers real-time driving data to enable dynamic pricing. With the added Tesla integration, Lemonade’s AI models can now differentiate between autonomous and human-driven miles, and assess risk based on factors such as the version of the autonomous software and sensor performance.
Lemonade said its Autonomous Car insurance will support intermittent use of FSD as well as households with a mix of vehicle types. The rollout will begin in Arizona on January 26, followed by Oregon about a month later. The company added that pricing is expected to fall further as FSD software continues to improve safety.
The launch fits with Lemonade’s broader strategy of using artificial intelligence to enhance underwriting precision and operating efficiency. Tesla owners will be able to obtain quotes via the Lemonade app or online at tesla.lemonade.com/fsd.