--- title: This Auto Insurer Is Offering a '50% Discount' to Customers With Self-Driving Cars description: Lemonade is advertising a "50% discount" to Tesla drivers who use Full Self-Driving (Supervised) mode. Is this the future of car insurance? authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 601 covers: - Insurance - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Insurance - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2026-07-10T16:52:33.000Z' modified: '2026-07-10T16:52:33.000Z' section: Insurance tags: - News word_count: 1061 canonical: https://money.com/self-driving-car-insurance-discount-lemonade/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Collage of Car and insurance related items](https://img.money.com/2026/07/News-Lemonade-Car-Insurance.jpg) Could self-driving cars be the secret to cheaper auto insurance? It's early days, but some signs are pointing in that direction. The insurance company Lemonade, for instance, is already advertising a "50% discount" to Tesla drivers when Full Self-Driving (Supervised) mode is engaged. Human errors are often behind car crashes, making roads less safe and contributing to the cost of [car insurance](https://money.com/best-auto-insurance/). Replace human drivers with less-mistake-prone computers, and the cost to insure self-driving cars will fall to a fraction of present amounts. At least, that's the idea. "The consensus view is that increasing vehicle autonomy will materially reduce accident claim frequency," Robert Hartwig, former president of the Insurance Information Institute and now an associate professor at the University of South Carolina's business school, tells Money in an email. "All else equal, declining accident frequency will result in fewer claims and lower insurance costs. The problem is that 'all else' is not equal." Even if autonomous driving *can* reduce crashes, there are several reasons self-driving cars could fail to deliver insurance savings. A big one: Repair costs could rise as automakers add expensive sensors and cameras that must be fixed and recalibrated after collisions. Here's what else you need to know. ## Will self-driving cars slash car insurance costs? Tesla and Waymo are the leaders in self-driving technology. Both already have cars on the road with autonomous or partially autonomous driving features that can take passengers from point A to point B. Waymo's most [recent ads](https://www.youtube.com/watch?v=MbZcOpGDGtg) tout that its vehicles — which boast a system that "never blinks" — are much safer than cars driven by humans, who may be inexperienced, tired, angry, intoxicated or otherwise slow to react. But because Waymo is focused on robotaxis, the cost of consumer car insurance currently has little bearing on the Google-owned company. For Tesla, it does. The company prices its Full Self-Driving (FSD) add-on subscription at $99 per month, [claiming](https://www.basenor.com/blogs/news/tesla-fsd-supervised-improves-us-road-safety-by-over-80#:~:text=Tesla%20North%20America%20made%20a,United%20States%20by%20over%2080%25.) that it "improves U.S. road safety by over 80%." To hear Tesla tell it, the value proposition of FSD isn't just a better and safer driving experience — it's also cheaper insurance. Tesla drivers using Tesla Insurance, the company's in-house option, can take advantage of an [FSD discount](https://www.tesla.com/insurance): The score-based insurance pricing model awards drivers a perfect 100 score for FSD miles, resulting in "lower insurance premiums over time," according to Tesla's website. Lemonade's discount, now in four states, has a similar premise but a somewhat different structure. While Americans are starting to see more self-driving cars on the roads, Tesla, Waymo and the companies trying to catch up to them still have work to do. They must prove to regulators that their technology is safe enough for broader approval and show insurers that it is safe enough to warrant discounts. Both are crucial to getting the general public to buy in. But insurance experts stress that there's a difference between the statistics you see in a flashy commercial and the type of rigorous data science that actually gets new tech accepted for the road. "Tesla's safety reporting statistics are unmoored from reality," says Bryant Walker Smith, an associate professor of law at the University of South Carolina, who studies self-driving cars. A recent report from [Reuters](https://www.reuters.com/investigations/why-teslas-ai-trainers-dont-trust-its-self-driving-tech-or-its-safety-stats-2026-05-28/) alleged that Tesla made apples-to-oranges comparisons of its crash rates, unfairly stacking incidents defined by airbag deployment against crashes that involved tow trucks (a lower bar). Outside analysts told the outlet that Tesla vehicles with FSD actually traveled about three times farther between crashes than typical cars — not 10 times farther, as the company had claimed. The National Highway Traffic Safety Administration also has four active investigations related to Tesla self-driving. ## Lemonade's discount: The promise — and limitations The digital insurance company's FSD discount became available in Colorado in late June following earlier launches in Indiana, Oregon and Arizona. The company says it expects to roll it out to all of the states where Lemonade offers car insurance later this year. Maya Prosor, Lemonade’s chief business officer, tells Money the company sees "sophisticated," personalized pricing that better reflects true risk as the solution to the rising cost of car insurance. "When it comes to Tesla and autonomous driving, the data is already there to showcase that it's really much safer than humans driving," she says. A 50% discount on car insurance surely sounds groundbreaking. But the fine print is important. Unlike most traditional car insurance policies, Lemonade's pricing is a pay-per-mile model, and the insurer relies on telematics data from Tesla to determine when FSD is in use. It's a type of [usage-based insurance](https://money.com/usage-based-car-insurance-gaining-customers/), or UBI, program. For example, one Arizona driver [posted a screenshot](https://www.reddit.com/r/TeslaModelY/comments/1qoh12f/comment/o21784m/) on Reddit of pricing that shows a $98.64 base premium, plus a usage-based charge of about 10 cents for every normal mile driven and a 5-cent charge for every autonomous mile. The 50% discount only applies to the usage-based per-mile charge. The base premium is unchanged. Lemonade executives acknowledge that the current market for self-driving vehicle insurance is limited. The company wanted to be first out the gate, Prosor says, and sees the discount as a long-term investment to acquire customers. According to Prosor, some Tesla FSD users are saving 30% to 40% on their car insurance with Lemonade. In online forums, however, users have shared a mix of experiences: Some [reported savings](https://www.reddit.com/r/TeslaInsurance/comments/1u3ueza/comment/orc8aqg/), while others said Lemonade's quotes were significantly more expensive than their current insurance. Critics of the discount, like Smith, call it pure "marketing," comparing it to a grocery store that puts an arbitrary $8 list price on a box of cereal, charges $4 (the standard price) and calls it a 50%-off sale. Others have concerns beyond price. Patrick R., a Minnesota resident who owns a 2025 Tesla Model Y Performance insured by USAA, tells Money he prefers to keep his driving data to himself. Lemonade "need\[s\] to connect to [your car](https://money.com/best-cars/) to verify that you are using FSD to get any discounts," he says in a message. "That allows them to see how you drive, i.e. speeds, driving times, total miles driven. The Tesla API also allows them to see all the locations you have driven to, as well." He adds that he does not pay for FSD because he doesn't feel it's worth the cost. "They would need to give me a discount of more than $99 a month to cover the cost of FSD," he says. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/self-driving-car-insurance-discount-lemonade/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Insurance", "item": "https://money.com/insurance/" }, { "@type": "ListItem", "position": 3, "name": "Car Insurance", "item": "https://money.com/car-insurance/" }, { "@type": "ListItem", "position": 4, "name": "This Auto Insurer Is Offering a '50% Discount' to Customers With Self-Driving Cars" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/self-driving-car-insurance-discount-lemonade/#webpage", "url": "https://money.com/self-driving-car-insurance-discount-lemonade/", "name": "This Auto Insurer Is Offering a '50% Discount' to Customers With Self-Driving Cars", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2026-07-10T16:52:33.000Z", "mainEntity": { "@id": "https://money.com/self-driving-car-insurance-discount-lemonade/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/self-driving-car-insurance-discount-lemonade/#breadcrumb" }, "dateModified": "2026-07-10T16:52:33.000Z" }, { "@type": "NewsArticle", "headline": "This Auto Insurer Is Offering a '50% Discount' to Customers With Self-Driving Cars", "articleSection": "Insurance", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2026/07/News-Lemonade-Car-Insurance.jpg", "width": 2880, "height": 1920, "caption": "News-Lemonade-Car-Insurance" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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