Lemonade to Cut Tesla Insurance Rates by 50% for FSD-Driven Miles, Launching Jan 26

SAN FRANCISCO, Jan 21, 2026 (Reuters) – U.S. insurer Lemonade announced a 50% reduction in pay-per-mile insurance rates for Tesla owners when the company’s Full Self-Driving (FSD) software is active, citing data showing significantly fewer accidents during autonomous operation. The move, part of Lemonade’s new Autonomous Car insurance product, leverages vehicle telemetry from Tesla’s onboard computer to differentiate miles driven via FSD—classified as Level 2 autonomy—from human-driven miles. The discount will launch in Arizona on Jan 26 and expand to Oregon in February. Lemonade Co-Founder Shai Wininger said the insurer’s models use real-time sensor data to price risk more accurately, noting that FSD-equipped Teslas have “far fewer accidents.” The company plans to lower premiums further with future FSD updates. While Tesla already offers up to a 10% monthly discount for high FSD usage, Lemonade’s offer represents a deeper incentive tied directly to driving behavior. Regulators continue to investigate FSD-related crashes and traffic violations, but Lemonade asserts its pricing reflects reduced risk based on observed data.