An interesting take on Tesla’s FSD
Tesla’s Full Self-Driving (FSD), which is currently only available in “supervised” mode, may soon gain a new advantage over competitors. Lemonade, a company that brands itself as an “insurance company built for the 21st century,” is proposing that Teslas with FSD should be insured for free. Its reasoning? Computers are safer than humans.
Lemonade integrates directly with Tesla’s onboard computer system to learn about your driving habits and mileage for its Pay Per Mile product, rather than the need for a dongle (UBI) like other insurance companies require. It’s unknown whether Lemonade has learned from this data that vehicles equipped with Tesla Full Self-Driving are indeed safer, or if this is simply a stunt.
Free insurance for Tesla drivers
Quote-tweeting his own announcement of the Pay Per Mile product, Lemonade CEO Shai Wininger said, “If @elonmusk is game, we’d be happy to explore insuring Tesla FSD miles for (almost) free.” Wininger has also said Lemonade’s use of the Tesla API for its Pay Per Mile program provides “richer and more accurate driving behavior data than traditional UBI devices.” It should also be noted that Tesla also has an in-house insurance division, but it operates only in 12 states, with plans to expand into Florida.
It’s clearly something Lemonade wants to explore, and it’s enticing. Autonomous rideshares have already proven to be safer and effective than human drivers. Waymo, for instance, is what Tesla FSD should be, and the company has proven to be much less accident-prone than humans. It’s reasonable to conclude that when done right, Full Self Driving would eliminate or significantly reduce insurance costs, especially at scale.
How real is this?
There are a few key points to note: Full Self-Driving requires supervision, and the unsupervised version of FSD is not yet available. That means that currently, FSD amounts to little more than advanced cruise control with some advanced safety features. It’s not known how much safer FSD is than a human driver. Its latest update also muddies the waters a bit for Lemonade’s plan, allowing FSD to mimic your driving style and habits more closely, bringing the automated driving system closer to human behavior. If FSD is trying to be more like you, how will it save you money on car insurance?
The latest version of FSD, 14.2, also attempts to remedy many of the issues drivers (passengers, maybe?) have had, including jerky handling. Its release notes also note that it will now pull over for emergency vehicles, avoid road debris like boxes, and respond better to being cut off or to unforeseen road conditions.
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Final thoughts
Teslas aren’t cheap to insure, and sometimes can’t be insured at all, making Lemonade’s proposal intriguing. Buying FSD upfront would get you autonomous driving, and it could be considered an upfront insurance payment for the duration you own that vehicle.
Whether or not Lemonade will follow through is another matter. It has access to the Tesla API, and nothing is stopping it from insuring Teslas—or any vehicle—for free now. Lemonade also has a track record of bailing on programs. Late last year, it abandoned its homeowners insurance program ahead of launch and has pivoted to renters insurance instead. We’ll just have to wait and see if the X post becomes more than a mere proposal.
