Lemonade's Bold Bet on Tesla: Slashing Rates for Safer Self-Driving

U.S. insurer Lemonade is offering a 50% rate cut for Tesla drivers using Full Self-Driving technology, citing reduced accidents. Tesla shares telemetry data, allowing Lemonade to differentiate FSD from human driving. The move supports Tesla CEO Elon Musk's safety claims amid regulatory concerns. Lemonade's insurance debuts soon in Arizona and Oregon.

Lemonade, a U.S. insurer, announced a substantial 50% rate reduction on Wednesday for Tesla drivers utilizing Full Self-Driving (FSD) software, asserting it leads to fewer accidents. This development comes as a backing to Tesla CEO Elon Musk's assertion that the technology enhances safety compared to traditional human driving, despite ongoing regulatory scrutiny.

Through collaboration, Tesla provides Lemonade with vehicle telemetry data, helping differentiate between FSD and manual driving. Lemonade's Co-Founder, Shai Wininger, emphasized their high-resolution monitoring capabilities, highlighting that FSD use reportedly doubles the safety of average drivers, though detailed data remains undisclosed.

Known as Autonomous Car insurance, this new offering addresses the challenges traditional insurers face with pricing coverage for different self-driving features. While Tesla's FSD represents Level 2 autonomy, regulatory concerns persist about its reliability, especially in adverse weather. Lemonade plans to roll out this insurance in Arizona and Oregon imminently, with further rate cuts anticipated alongside future FSD updates.

(With inputs from agencies.)