Company Now Hooked Into Tesla Aims To Insure Self-Driving Cars by the Mile

Elon Musk may be in a row with RyanAir over allowing Starlink in its airplanes, but insurer Lemonade is sharing in a lovefest with the mogul’s car company, announcing a deal on Wednesday to slash insurance on Tesla owners by 50 percent when the full self-driving option is in use.“#TeslaFSD is 2X safer than humans, so why are Tesla owners still charged so much to insure their cars?” asked Lemonade’s co-founder Shai Wininger. “A car that sees 360 degrees, never gets drowsy, and reacts in milliseconds can’t be compared to a human.” Lemonade uses a risk-prediction model that is automatically updated with every move the vehicle makes. Unlike most user-based insurance telemetry devices — a sensor pack of hardware and software that typically measures speed, braking, parking, GPS location, battery or engine health, airbag or crash data, other sensors, and driver assist mechanisms — Lemonade’s “telematics infrastructure” taps directly into Tesla’s apps to adjust pricing by the mile rather than country- or statewide averages.Mr. Wininger, whose co-founder also came up with the gig economy app Fiverr, first proposed installing the devices on Teslas last year. He noted that fully self-driving cars will change the way insurance is calculated.“As we evolve the product and FSD becomes fully unsupervised, driver age and driving history will no longer matter as pricing factors. A young driver will pay the same low FSD rate as their mom and dad,” he said. “Insurance is half price when Tesla self-driving is activated, because it increases safety so much,” Mr. Musk said Wednesday on his X platform.While Lemonade insurance will cost precisely half on Teslas, some are questioning why the discount is not greater since Tesla claims that when its fully self-driving vehicles are engaged, cars are seven times less likely to be involved in an accident.One competitor to Lemonade may be Tesla itself. Tesla is a first-party insurer for its own vehicles, covering its self-driving functions in states that permit setting insurance rates based on telemetry data. In California, which bans user-based data, and other states that have regulations over privacy concerns tied to tracking individual driver behavior, Tesla relies on actuarial tables.Founded in 2015 and insuring about three million customers, data-heavy Lemonade is not available in states where telemetry-based pricing is regulated. Lemonade’s Tesla offer is rolling out only in Oregon and Arizona for now. The company also won’t cover non-self-driving-related incidents like fire, theft, vandalism, and others damaging or hitting an insured’s car. Mr. Wininger said that households with self-driving cars may still bundle their auto insurance with other vehicles that are not self-driving.

Company Now Hooked Into Tesla Aims To Insure Self-Driving Cars by the Mile

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