Tesla FSD Could Cut Car Insurance Costs by Up to 50 Percent
Why using Tesla’s self-driving feature could change how much you pay every month for insurance
Tesla’s Full Self-Driving feature is being talked about for a new reason, and this time it is not only about technology. It is about saving money. According to new insurance data, Tesla FSD could help drivers cut their car insurance costs by as much as 50 percent.
Tesla says that when drivers use Full Self-Driving, the chances of getting into an accident drop a lot. Based on the company’s data, a Tesla using FSD would need to travel around 5.1 million miles before being involved in a major crash. That number looks even bigger when you compare it to the U.S. average. Across all cars and brands, a major accident happens about every 699,000 miles.
These safety claims are now being reflected in insurance pricing. Lemonade, a digital insurance company in the U.S., has introduced a new insurance plan made specifically for autonomous driving. The plan rewards Tesla drivers who use FSD instead of driving fully on their own.
Under this new program, Lemonade says it will charge much lower per-mile insurance rates when FSD is active. In some cases, the discount can go as high as 50 percent. That is not a small saving, especially at a time when car insurance prices keep going up.
Lemonade believes traditional insurance companies are not keeping up with modern technology. Most insurers look at the driver and the car in a very basic way. Lemonade looks deeper. It uses real driving data from Tesla vehicles. This includes sensor data and how often FSD is actually used on the road. The safer the driving behavior, the lower the insurance cost can become.
Another interesting part is that you do not need to own only Teslas to use this insurance. If a household has one Tesla with FSD and another car from a different brand, Lemonade can still offer one policy. The pricing adjusts based on how much FSD is used and how the other car is driven.
So what does this mean in real numbers? Lemonade’s 2025 data shows that insuring a Tesla Model Y costs about $32 per month on average. Over six months, that comes out to roughly $183. With the new autonomous insurance plan, a Model Y owner could save more than $90 in six months. Depending on driving habits and the Tesla model, the savings could be even higher.
Tesla FSD is still classified as a Level 2 system. Drivers must stay alert and be ready to take control at any time. Still, it can handle point-to-point driving, even on city streets. Many other carmakers are still trying to catch up in this area.
Despite the progress, many people remain unsure about self-driving technology. A recent AAA study found that six out of ten Americans are afraid to ride in a self-driving vehicle. The technology is also expensive, with Tesla FSD currently priced at $8,000.
Lower insurance costs could change how people feel about it. Saving money every month gives drivers a practical reason to try self-driving, not just a tech reason. Over time, those savings could help cover a big part of the FSD cost.
For now, Lemonade is leading the way. The next question is whether bigger insurance companies will follow. If they do, self-driving cars may soon become much easier on the wallet.
