How Lemonade Car Insurance Works (Including the Tracking Device and Teslas)

Lemonade Car is app-based car insurance that prices your policy partly on how and how much you drive. You get a quote and manage everything in the Lemonade app, claims start in the app with an AI assistant, and leftover premiums can go to charity through the Giveback. Its pay-per-mile plan has used a small plug-in tracking device — but for Teslas, Lemonade connects directly to the car instead, with no device at all.

How Lemonade Car works

1. Get a quote in the app. Answer questions about you, your car and your driving.
2. Choose your coverage. Liability, collision, comprehensive and add-ons like roadside assistance.
3. Share driving data. Lemonade uses driving information to help set your price — through its app, a device on the pay-per-mile plan, or a direct connection for Teslas.
4. Pay monthly. Your price can reflect mileage and driving behavior.
5. File claims in the app. Lemonade's AI assistant handles simple steps; people handle complex claims.

The Lemonade Car device explained

Lemonade's pay-per-mile product — which grew out of its Metromile acquisition — has used a small plug-in telematics device in the car's diagnostic (OBD-II) port to count miles and record driving. It's how a per-mile price knows how many miles you drove.

Is the device mandatory?

It depends on the plan and the car:

• Pay-per-mile plans need mileage tracking, which has meant the plug-in device on most cars.
• Teslas don't need it. Lemonade connects directly to Teslas through Tesla's Fleet API with your permission, so there's nothing to plug in. Teslas don't have a standard OBD-II port anyway.

Check the app for what your plan and car require.

How driving data changes your rate

Lemonade's pricing can reflect:

• How many miles you drive — fewer miles usually means a lower bill on per-mile plans.
• How you drive — such as hard braking and speeding, where data is collected.
• For Teslas, how much you use FSD — Lemonade charges about half the normal per-mile rate for miles driven with FSD engaged, in states where its Autonomous Car pricing is live.

For Tesla owners: does Tesla telematics conflict?

No — for Teslas, the car's own data replaces Lemonade's device. With your permission, Lemonade reads mileage and FSD usage through the Fleet API and prices automatically; there's no self-reporting. To get the FSD discount you need:

• Hardware 4 (AI4) or newer — check with the Hardware Checker
• Recent software (Lemonade lists firmware 2025.44.25.5 or newer)
• A participating state: Arizona, Oregon, Indiana, Colorado, Tennessee or Missouri as of October 2026

If you're also considering Tesla Insurance, note that it uses the car's own Safety Score in most states instead. See Tesla FSD insurance discounts and Tesla Insurance vs Lemonade.

The Giveback

Lemonade takes a flat fee from premiums, uses the rest to pay claims, and donates leftover money to charities its customers choose — the Giveback. It doesn't lower your own premium, but it's part of how Lemonade says it avoids an incentive to deny claims.

Claims process

1. Open the Lemonade app and start a claim.
2. Describe what happened to the AI assistant and upload photos or video.
3. Simple claims can be reviewed quickly; complex claims go to human adjusters.
4. Repairs are arranged with partner shops; for Teslas, ask about Tesla-certified repair.

As with any insurer, experiences vary — read recent reviews from drivers in your state.

Frequently asked questions

Does Lemonade car insurance track you?

It uses driving data to price policies — through its app, a plug-in device on pay-per-mile plans, or a direct connection for Teslas.

Do I have to install the Lemonade device?

On pay-per-mile plans for most cars, yes. Teslas connect through the Fleet API instead, with no device.

Is Lemonade car insurance available in my state?

It's sold in a limited set of states. Check the app with your ZIP code.

Does Lemonade give a discount for Tesla FSD?

Yes — about 50% off the per-mile rate for FSD miles on HW4 Teslas in six states as of October 2026.

The bottom line

Lemonade Car rewards low mileage and, for Teslas, FSD miles — with a direct car connection instead of a tracking device. Find out whether it fits with the Is Lemonade Right for Me? quiz and estimate savings with the Lemonade vs Tesla Insurance Calculator.