Lemonade today unveiled its new Autonomous Car insurance product, designed exclusively for vehicles operating with Tesla’s Full Self-Driving (FSD) software. Policyholders will see per-mile rates cut by approximately 50% whenever FSD is engaged, based on Lemonade’s analysis of telematics data showing significantly lower incident rates during autonomous operation. The product is scheduled to roll out in Arizona on January 26 and in Oregon one month later, with quotes available instantly via the Lemonade app or online at tesla.lemonade.com/fsd.

Under a technical partnership with Tesla, Lemonade now receives detailed vehicle data—sensor precision, software version, mileage logged under FSD—that feeds directly into its usage-based risk models. These models, already among the most advanced in the industry, distinguish between human and autonomous driving behavior to predict loss frequency and severity with higher granularity than traditional rating factors such as driver age or credit score. Additional discounts can be unlocked for safe driving behavior and by bundling with Lemonade homeowners, renters or pet policies.

In Q3 2025, Lemonade reported a trailing-12-month loss ratio of 67%, down 10 percentage points from 77% a year earlier, reflecting gains from its AI-driven pricing and claims automation. Management is targeting positive adjusted EBITDA for full-year 2026 and net income in 2027, signaling a clear path to profitability. Investors have bid the stock up 383% over the past two years as the company demonstrates consistent engineering of lower loss costs and faster claim resolution times.

Beyond the initial Arizona and Oregon launches, Lemonade continues to offer its standard car insurance product in ten states, including California, Texas and Washington, with plans to expand Autonomous Car coverage as FSD software updates further reduce risk. The company’s broader ambition is to become the lowest-cost, best-experience insurer globally, leveraging its AI tech stack to pass savings directly to customers and deliver Giveback donations from unused premiums.