Lemonade Extends FSD Insurance Discount to HW3 Tesla Owners

Tesla owners with legacy Hardware 3 (HW3) vehicles can finally save on insurance with Lemonade when FSD is driving. As first reported by Tesla North, the insurer now takes 30% off every mile driven on FSD (Supervised) v14 Lite in Arizona, Colorado, and Tennessee.

Co-founder Shai Wininger announced the change on X, writing, “Teslas are insanely safe, but traditional insurance has no clue.” HW4 owners keep the 50% discount on FSD miles Lemonade introduced earlier this year, while manual miles are billed at the regular per-mile rate.

How Lemonade’s HW3 Discount Works

Lemonade’s Autonomous Car Insurance is pay-per-mile. You pay a low base rate while the car is parked and a few cents per mile when it moves. With your permission, Lemonade connects to your Tesla through Tesla’s Fleet API, which reports which miles were driven on FSD and which were driven manually.

To qualify, your HW3 Tesla must be a 2019 or newer model running FSD v14 Lite on software version 2026.20.6.11 or higher. There’s no minimum FSD usage requirement, and existing Lemonade customers get the discount automatically at renewal.

HW3 cars were shut out of Lemonade’s FSD discounts until now. Back in February, Lemonade said HW3 vehicles “do not meet the current hardware requirement” for the discount. That changed after Tesla began rolling out FSD v14 Lite to HW3 Model 3 and Model Y vehicles in July. It has since reached HW3 Model S and Model X vehicles, and Tesla just started rolling out FSD v14.3 Lite in update 2026.33.5 this week.

Why HW3 Owners Get a Smaller Discount

Lemonade hasn’t explained why Lite miles get 30% off instead of 50%. Its pricing models factor in the FSD version installed and the precision of the car’s sensors, and HW3 runs a distilled version of the main FSD v14 branch on older cameras and compute. Lemonade also hasn’t shared crash data for v14 Lite or said whether HW3 drivers could eventually reach the 50% rate.

Availability is narrower too, at least at launch. Lemonade’s FSD insurance is also live in Oregon, Indiana, and Missouri, but the HW3 discount hasn’t reached those states yet. Wininger says more states are coming soon.

Tesla Insurance already offers FSD discounts to both HW3 and HW4 owners who drive at least half their miles on FSD. However, Lemonade’s per-mile approach goes further and is the first instance of a third-party insurer giving FSD users on HW3 a discount. Lemonade has also promised discounts will grow as FSD gets safer, so the gap between HW3 and HW4 rates could narrow as Lite builds improve or, more likely, legacy vehicles finally get their long-promised hardware upgrades.