Lemonade Expands Tesla FSD Insurance Discount to HW3

Lemonade is expanding its Tesla insurance program to include older vehicles equipped with Hardware 3 (HW3), giving more owners an opportunity to lower their premiums when using Full Self-Driving (Supervised).

Starting Thursday, Lemonade takes 30% off every mile an HW3 Tesla drives on FSD v14 Lite. For now, only drivers in Arizona, Colorado and Tennessee qualify, but Lemonade says more states are coming.

For HW3 owners, eligibility requires a 2019 or newer Tesla running firmware 2026.20.6.11 or later. Current customers get it automatically at their next renewal.

The discount is smaller than the 50% offered to owners of newer HW4-equipped Teslas running FSD v14.2 or later.

Teslas are insanely safe, but traditional insurance has no clue. Lemonade connects directly to your @Tesla and cuts insurance costs by 50% on miles driven with FSD (Supervised). And… as of today, HW3 Teslas get 30% off with FSD v14 Lite! Live in AZ, CO & TN + more soon: https://t.co/EYapOeDWOz
— Shai Wininger (@shai_wininger) October 8, 2026

Lemonade’s Autonomous Car insurance program works differently from traditional policies. Using Tesla’s Fleet API, and with the owner’s permission, the insurer tracks how many miles are driven manually versus with FSD activated. Each category is then priced separately, meaning owners who use FSD more frequently can potentially save more.

Importantly, the 30% and 50% discounts apply only to eligible FSD miles, not the entire insurance premium.

Tesla began rolling out FSD v14 Lite to HW3 vehicles earlier this year, adapting improvements from its newer software to work within the limitations of the previous-generation computer. The update brought improved driving behaviour and responsiveness. Tesla is currently deploying FSD V14.3 Lite to early testers, with a wider release expected soon.

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