Tesla drops insurance premiums for those who drive on FSD

As the FSD miles between major interventions increase on Tesla vehicles, it is starting to prepare the groundwork for convincing regulators that its autonomous system is safer than human drivers.

Elon Musk cited 8x the safety advantage, but that is compared to relatively old NHTSA numbers, while Tesla's own direct comparison returns 6x fewer crashes when on FSD and Autopilot, compared to manual driving.

Tesla is taking it slow, with its own insurance that it only provides in a couple of states. Elon Musk is so convinced that FSD is safer than humans, that Tesla is now offering an insurance premium discount that increases with the amount of miles driven on FSD.

Starting with Texas and Arizona, Tesla will lower the insurance premiums for new policyholders this month, or on March 8 for those who renew. The way it works is that Tesla will log the total amount of miles driven in any particular month, then calculate what percentage of those miles were covered with its Full Self-Driving feature active.

The bigger the percentage, the bigger the discount, potentially encouraging people to rely more on FSD than on their manual driving. One needs to log at least five miles or 1% of total miles on FSD in a 30-day period to qualify for the discount.

If the Tesla car is on FSD half of the time, Tesla will deduct 10% of the insurance premium from the next payment. The deal is only valid for those who have purchased FSD or for monthly subscribers, rather than new owners who are in their free 30-day FSD trial period. Another caveat is that certain policy elements like comprehensive insurance or uninsured motorist coverages are not included in the FSD deduction offer, so the total discount may be less.

While Tesla's own insurance is only offered in a handful of states and is not that great of a deal to begin with, the obvious intention is to have FSD affect a driver's safety rating for insurance purposes, and be able to demonstrate the existence of such a discount program to regulators.

Tesla is preparing to launch unsupervised FSD without driver in the car in Austin this June, and it will need all the regulatory goodwill it can get to expand its robotaxi service in more major cities by the end of the year.

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