Digital insurance provider Lemonade has announced a new insurance offering tailored specifically for users of Tesla’s advanced driver assistance system, known as Full Self-Driving (Supervised). The insurer claims this product will lead to a roughly 50% reduction in per-mile rates for customers.
This innovative insurance solution represents one of the initial ventures targeting the pricing of insurance based on the performance of software systems in managing driving tasks. It signifies a potential trend where companies may explore novel business opportunities as various levels of vehicle autonomy become more prevalent.
By collaborating with Tesla, Lemonade has gained access to previously restricted vehicle telemetry data, enabling the insurer to develop its own usage-based risk prediction models. These models will determine whether the vehicle is being operated in Full Self-Driving mode or by the driver, allowing Lemonade to adjust pricing accordingly.
Lemonade’s ‘Autonomous Car insurance’ acknowledges that Tesla’s software does not currently achieve full autonomy, necessitating drivers to remain vigilant for manual intervention. Nonetheless, the company’s move reflects a belief in the eventual realization of Elon Musk’s vision for completely autonomous vehicles.
The Autonomous Car insurance will debut in Arizona on January 26, with Oregon following in the subsequent month. Lemonade anticipates that as the Full Self-Driving software improves in safety, insurance prices will correspondingly decrease. The company’s existing auto insurance product covers ‘most popular cars’ in Arizona, California, Colorado, and Illinois.
Source: TechCrunch