Lemonade, a tech-based insurance company, has proposed a near-zero policy plan for Tesla $TSLA ( ▲ 1.93% ) Full Self-Driving (FSD)—standing firm on the idea that autonomous technology improves vehicle safety on the road.
The details: Shai Wininger, Lemonade’s co-founder and president, made the bold pitch on X, touting how seamless Lemonade can be integrated with Teslas to appeal to owners who might live in a state beyond the 12 where the automaker’s in-house insurance runs, reports Beinsure.com.
Lemonade has already built a direct integration with Tesla vehicles, which eliminates the need for plug-in telematics hardware in its Pay Per Mile product.
The “insuretech” company’s system allows for more accurate driving data, lower costs, and enables Tesla drivers to use the “Lemonade Car” product without extra hardware.
Lemonade’s largest auto market currently is California, where Beinsure analysts estimate that the “insuretech” company currently has about 30,000 active auto policies, against roughly 256,000 Tesla vehicles insured in the state. Across all markets, Lemonade has 84,273 auto policies.
What they’re saying: “We’re starting to roll out direct integration with @Tesla vehicles, removing the need for a UBI device in our Pay Per Mile product,” reads Wininger’s X post. “This makes activating Lemonade Car on Teslas effortless and lets us cut hardware and shipping costs, helping lower prices for Tesla drivers even further.”
Shai Wininger
Why it matters: Lemonade’s move (if it materializes) could mark a key shift in how car insurance adapts to autonomous driving technology. By directly integrating with Tesla vehicles and eliminating the need for hardware, Lemonade is demonstrating how digital-first insurers can lower costs, simplify setup, and price risk more precisely using real vehicle data.
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Between the lines: Lemonade’s big bet on Tesla’s FSD system comes at an interesting juncture for the electric vehicle company, which finds itself facing mounting legal issues as it rolls out the latest version of its technology to a wider consumer base.
After working to refine its new v14 FSD system with supervised test runs, Tesla has now started to expand the solution beyond its Early Access Program (EAP) members.
At the same time, the electric vehicle company finds itself embroiled in a growing number of lawsuits over its FSD systems not delivering on promised capabilities.
Bottom line: Lemonade is wagering that Tesla’s autonomous technology will ultimately prove safer (and cheaper) to insure, moving to undercut traditional insurers with lower costs and a smoother customer experience. But the success of this strategy hinges on Tesla’s ability to deliver on its Full Self-Driving promises amid mounting legal and performance scrutiny.
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