The price cut is for Lemonade’s pay-per-mile insurance. — Reuters
SAN FRANCISCO: US insurer Lemonade will offer a 50% rate cut for drivers of Tesla electric vehicles when the automaker’s full self-driving (FSD) driver assistance software is steering because it has data showing it reduced accidents.
Lemonade’s move is an endorsement of Tesla chief executive officer Elon Musk’s claims that the company’s vehicle technology is safer than human drivers, despite concerns flagged by regulators and safety experts.
As part of a collaboration, Tesla is giving Lemonade access to vehicle telemetry data that will be used to distinguish between miles driven by FSD – which requires a human driver’s supervision – and human driving, the New York-based insurer said. The price cut is for Lemonade’s pay-per-mile insurance.
“We’re looking at this in extremely high resolution, where we see every minute, every second that you drive your car, your Tesla,” Lemonade co-founder Shai Wininger told Reuters.
“We get millions of signals emitted by that car into our systems. And based on that, we’re pricing your rate.”
Wininger said data provided by Tesla combined with Lemonade’s own insurance data showed that the use of FSD made driving about two times safer for the average driver. He did not provide details on the data Tesla shared.
Tesla already offers its own insurance plan with a monthly discount of up to 10% for drivers who use FSD for more than 50% of the miles.
Lemonade’s new offering –called Autonomous Car insurance – comes as traditional insurers grapple with how to price coverage for the use of various levels of self-driving features that automakers are racing to deploy.
Commercialising autonomous vehicles has been harder and far costlier than expected.
Most automakers offer level two autonomy on personal vehicles for highway operation that requires the driver to pay constant attention to the road and remain in charge.
Tesla’s FSD is categorised as level two and is capable of driving on city streets as well as highways.
But Tesla’s technology – which mainly uses cameras and artificial intelligence rather than redundant sensors that most others bank on – has sparked worries about its limitations, especially during inclement weather.
The US auto safety regulator has investigated multiple crashes involving Tesla’s FSD and is examining claims that vehicles using the technology have committed traffic violations.
“These things are not fully autonomous yet and they require a certain intervention level, a skill level from the driver,” Wininger said. “So 50% off, based on data, is what we believe the improvement is of you as a driver using this technology, but not that technology driving by itself.”
The new product will roll out in Arizona on Jan 26 and in Oregon in February, Lemonade said.
Wininger said the company would reduce rates further as Tesla releases FSD software updates that improve safety. — Reuters
