Car insurance with telematics programs
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Telematics programs are programs that use an app or device in your vehicle to track your driving habits. These programs may help you become a better driver, and insurance companies may use the information gathered to extend you a discount or lower your premium based on safe practices behind the wheel. Telematics programs are a form of usage-based insurance. These programs may also help you become eligible for low mileage insurance discounts or even eligible for coverage with selective insurance companies like Root. Telematics technology has actually been around for over a decade, but the use of telematics is continuing to rise in popularity.
What are telematics programs?
Insurance carriers may use telematics to create usage-based rates for premiums. With the data collected, a policy may be curated to fit the exact needs of the driver. Telematics may be used to customize a policy by adjusting rates based on factors like miles driven, driving frequency and safe driving habits.
If you choose a car insurance company with a telematics program, you may opt to enroll in the program. The enrollment process may differ between carriers, but you will typically either download the telematics app or use an in-vehicle device.
You may be surprised by the amount of information a carrier can retrieve about a driver via telematics. Examples of the type of data collected and used may include:
- Number of miles driven
- Time of day
- Where the vehicle is driven
- How often there is rapid acceleration
- Number of times hard braking occurs
- If hard cornering takes place
- If an airbag is deployed
Is a telematics program right for me?
While a telematics program may be a good way to save on car insurance, it may not be the right program for everyone. If you regularly practice safe driving habits and have low average mileage, a telematics program might be right for you.
However, if you have a long commute, regularly drive at night, drive in stop-and-go traffic that could cause abrupt stops or use risky driving behaviors behind the wheel, a telematics program may not be the right choice for you.
Advantages of telematics
Telematics programs allow insurance companies to gather realistic data about a driver. The result may be more affordable rates, especially for low-risk drivers. Additionally, when a driver knows an insurance carrier is monitoring their driving, it may encourage them to practice safer driving habits.
Telematics also provide advantages for the insurance companies, which may help keep rates down. The data may be used in case of an accident to provide information such as the speed at the time of the incident or the location. Having this information at hand may help contribute to less fraud with filing claims.
Disadvantages of telematics
While lower rates may be a strong incentive for drivers to switch to telematics insurance, some drivers may have reservations regarding privacy concerns. Not all drivers are comfortable with an insurance company monitoring their location and moving habits.
Drivers may avoid a telematics program if they do not think their driving habits will earn them a discount on their premium. If you tend to drive above the speed limit, drive aggressively, brake excessively or engage in other perceived high-risk behaviors, utilizing telematics-based insurance may not be the right fit for you.
Insurance companies with telematics programs
Several insurance providers offer telematics programs to extend potential discounts to policyholders. The discount may be provided on a traditional auto insurance policy based on the data recorded. However, some carriers offer usage-based insurance, which may offer lower premiums based on the amount you drive.
Allstate offers the MileWise usage-based insurance program designed for low-mileage drivers. Drivers who enroll in this program pay for insurance per mile, while still choosing from standard auto insurance coverage types. Allstate recommends pay-per-mile insurance for low-mileage drivers such as those who work from home, commute using public transportation or retirees.
MileWise is currently only available in 21 states. If your state does not qualify for the MileWise option, DriveWise is another potential discount program. The DriveWise discount is based on safe-driving habits and could save you up to 40 percent on your premium.
Learn more: Allstate Insurance review
Nationwide has two telematics programs — SmartMiles and SmartRide. SmartMiles is a pay-per-mile usage-based program. The program is available in almost every state and rewards safe drivers with lower per-mile costs.
For those who do not want to enroll in the usage-based program, Nationwide offers SmartRide. Drivers may earn a 10 percent discount just by signing up for the telematics program, with potential savings up to 40 percent for safe driving habits.
Learn more: Nationwide Insurance review
Geico’s DriveEasy program is available in 33 states, plus Washington D.C. Like other telematics programs, your rate may fluctuate based on your driving habits. Drivers who participate could see increased rates as a result of unsafe habits, but Geico’s mobile app also allows users to track their driver score and habits in real time, which may make it easier to see where you could improve your driving.
Geico’s DriveEasy also has a Crash Assist predictive crash detection feature. If you hard brake, the app will ask if you were involved in a crash, then navigate to the claims department so you can start the process.
Learn more: Geico Insurance review
Progressive’s Snapshot is a usage-based program that tracks your driving habits through a plug-in device or telematics app. Snapshot is available in all states except California.
On average, drivers save $47 at sign up and then $156 when the program is completed, which will show on your next policy renewal. With Progressive, high-risk driving habits could cause premiums to increase, which happens to around 20 percent of drivers taking part in the Snapshot program.
Learn more: Progressive Insurance review
Other companies that offer telematics
Many other major car insurance companies also offer telematics programs. You may be able to save with by participating in these other telematics car insurance programs:
- American Family: KnowYourDrive and MilesMyWay
- Farmers: FairMile and Signal
- Liberty Mutual: RightTrack
- Root Car Insurance
- State Farm: Drive Safe and Save
- Travelers: IntelliDrive
- USAA: SafePilot
Frequently asked questions
Besides telematics programs, there are multiple other ways you may be able to save on car insurance. These include taking advantage of car insurance discounts, only buying the coverage that you need and comparing car insurance quotes to get the best rate on the coverage you need. You may also work to improve your credit score and avoid accidents and speeding tickets.
Not all telematics programs require the use of a smartphone. Some providers allow you to use an in-vehicle device instead. For example, Nationwide allows SmartMiles customers to choose between using a mobile app or a plug-in device.
There are two main categories of drivers that might be well-suited to a telematics program. Low-mileage drivers may choose a pay-per-mile usage-based telematics program if they think their average mileage will earn them a lower rate. Additionally, drivers who practice safe habits behind the wheel may be interested in a telematics program to potentially earn a safe driving discount. Speaking with a licensed insurance agent may help you determine if car insurance with telematics is the right choice for your needs.