How Telematics Are Helping People Save on Auto Insurance

How Telematics Are Helping People Save on Auto Insurance

Drivers across America are using telematics to save on car insurance.

A telematics driver tracking system analyzes your driving habits, then customizes your car insurance premiums based on those habits. Good drivers can save up to 30%.

How do telematics systems work? Should you use your insurer’s driver tracking app? Find out everything you need to know about telematics and driver tracking today.

How Telematics Driving Tracking Systems Work                                                                                                                          

Most major insurance companies now offer some type of telematics driver tracking program.

Here’s how it works:

  • You install an app on your phone.
  • You activate that app whenever you drive your vehicle.
  • The app uses your phone’s sensors to track your speed, braking habits, and other behavior.
  • After recording your data for a few weeks or months, the insurer uses this data to calculate customized rates.

If you are a safe driver with low average mileage, then you could save up to 30%, depending on your insurance company.

Most insurers use a mobile app to track your driving habits. However, some insurers use devices that plug into your vehicle. You might plug the device into your car’s OBD-II diagnostic port, for example.

How Much Can You Save?

Most insurance companies offer discounts of up to 15% to 30% through their telematics driver tracking systems (assuming you’re a good driver).

Some insurance companies offer a discount just for using the telematics system. Even if you’re a bad driver, and even if you have high mileage, you may still be able to save 5% to 10% just for installing the telematics system.

Generally, you can expect to save 5% to 30% using your insurer’s telematics driver tracking system.

What Does It Track?

Why does your insurer want to track your driving habits? Here are some of the things your insurer tracks using its telematics driver tracking system:

Mileage: The average American drives around 13,500 miles per year. If you have much higher or lower mileage than the average, then your insurer will adjust your rates. Low mileage drivers can save hundreds per year on car insurance, while high mileage drivers may need to pay a little more.

Braking and Acceleration: Are you the type of driver who slams on the brakes at every red light, then floors the accelerator? Statistically, you’re a riskier driver to insure. Telematics systems track your braking and acceleration habits.

Speed: Do you frequently speed? Do you drive too fast or too slow? Insurers use telematics to make sure you’re driving safely.

After calculating all of this data, insurers provide a customized rate. This rate is unique to you, and it’s based on your driving habits.

Best Telematics Driver Tracking Programs

Most major insurers now offer some type of driver tracking program. Some of the most popular driver tracking programs available today include:

  • USAA SafePilot
  • Progressive SnapShot
  • Allstate Drivewise
  • State Farm Drive Safe & Save
  • Esurance DriveSense
  • Nationwide SmartRide

Final Word

Smart technology makes it easier than ever for insurers to track your driving habits.

Some drivers are uncomfortable with driver tracking – and that’s okay. No insurer requires you to install driver tracking systems in your vehicle.

However, by signing up for your insurer’s telematics driver tracking program today, you could save up to 30% on car insurance.