Car Insurance with Telematics

Is "smart" car insurance the way to go, or is it cheaper to get car insurance without telematics?

Cheap car insurance with telematics

The use of telematics in auto insurance is a growing trend. In these usage-based insurance plans, car insurance companies use telematics devices to monitor your driving habits and performance — speed, mileage, total driving time — to more accurately determine your car insurance premium. If you’re a safe driver, you can get cheaper auto insurance with telematics. Let’s examine how some popular auto insurance companies use telematics and compare usage-based insurance policies.

Telematic auto insurance programs by company
  1. Progressive
  2. Allstate
  3. State Farm
  4. Esurance
  5. Nationwide
  6. Liberty Mutual
  7. Metromile
  8. Is it worth it?

Progressive SnapShot

Progressive’s SnapShot telematics program is relatively typical among major insurers. Progressive uses a telematics device to monitor the times of day you drive, sudden changes in speed — hard braking or rapid acceleration — and your mileage to better predict your driving habits and create your premium. You’ll need to have this device in your vehicle for one standard six-month policy period before the collected data can revise your insurance premium. A good driver can save an average of $130 each six months by using SnapShot.

It's worth noting that if your initial telematics testing shows any risky tendencies on the road, your premium could increase.

Progressive telematics program: average six-month premiums

Average Premium Average Premium with SnapShot
$648 $518

Allstate Drivewise

Allstate’s telematics program — called Drivewise — provides personalized driving feedback after each drive, as well as discounts for safe driving. Upon signing up for Allstate Drivewise, you receive 3% cash back (presumably on your premium going forward). Within the app, you’re able to view your last 100 trips, your rewards, and your driving behavior breakdown. Drivewise car insurance premiums are calculated based on a few data points: your “safe speed” — under 80 miles per hour — safe braking — minimal abrupt stops — and time of day. You can participate in the Drivewise program without having an Allstate car insurance policy. Within the app, you’re able to select “non-customer to view your telematics-generated driving data.

Allstate telematics program: average six-month premiums

Average Premium Average Premium with Telematics
$692 $498-$602

State Farm Drive Safe & Save

State Farm’s telematics program — Drive Safe & Save — uses either your OnStar device or a mobile device (paired with a Bluetooth device provided by State Farm) to calculate your premium. State Farm’s program weighs mileage more heavily than other driving characteristics, although those are still taken into consideration.

State Farm advertises savings of up to 50% through its Drive Safe & Save program. However, its emphasis on low-mileage driving, State Farm telematics may not be a good fit for drivers covering more than 7,500 miles per year.

State Farm telematics program: average six-month premiums

Average Premium Average Premium with Telematics
$646 $323

Esurance DriveSense

Esurance provides an immediate discount to its DriveSense users: 10% off premiums going forward. Esurance uses the same data as do other companies to generate your new premium: speed, braking, mileage, and time of day. As with Progressive’s SnapShot program, your costs may fluctuate each policy period as your driving changes. The more safely you drive while using telematics technology, the lower your premium will be. Esurance doesn’t advertise an annual rate of savings.

The Esurance DriveSense telematics program is only available in the following states: Arizona, Colorado, Connecticut, Georgia, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, New Jersey, Ohio, Pennsylvania, South Dakota, Texas, Utah, Virginia, and Washington.

Nationwide SmartRide

Nationwide's SmartRide telematics program provides an immediate 10% discount at signup. After your next policy renewal, your premium will be calculated based on how safely you drive. While the amount varies based on your driving data, the discount maxes out at 40%. You'll need to download the Nationwide SmartRide app or have a compatible telematics box in your vehicle to be eligible for a discount. Unlike some other telematics-powered insurance programs, SmartRide uses idle time to calculate your premium, in addition to nighttime driving, hard braking and acceleration, and mileage. Nationwide considers idle time — time spent stopped in traffic — an indication of risk that could dent your discount.

Nationwide telematics program: average six-month premiums

Average Premium Average Premium with Telematics
$565 $336

Liberty Mutual RightTrack

Liberty Mutual’s telematics program, RightTrack, uses a plugin device which you need to install 30 days prior to the start of your next policy. After 90 days, your safe driving “score” is determined using the data collected by the app. Liberty Mutual advertises telematics savings of between 5% to 30% on your policy for safe drivers. Like other policies, RightTrack monitors your braking, acceleration, nighttime driving, and how many miles you drive.

Like other programs, RightTrack uses a plug-in telematics box, shipped to you with specific instructions.

Liberty Mutual telematics program: average six-month premiums

Average Premium Average Premium with Telematics
$640 $448-$608

Metromile telematics

Metromile is a bit different than the other companies mentioned. The company's model is pay-as-you-drive insurance. Meaning, your base insurance cost could be as low as $29, after which point you're charged depending on your mileage. While it may depend on your vehicle and your annual mileage, Metromile advertises savings of up to $611 per year. Metromile seems like a logical option for low-mileage drivers.

Metromile is only available in California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.

Is it worth it?

Regardless of what the “it” is, this can be a tricky question to answer. Participation in most car insurance telematics programs is free — including use of the tracking device. If you’re considering participation in a telematics program, the big question is: will my car insurance be cheaper without telematics? This comes down to whether you drive safely or not.

On the other hand, telematics can prevent your being penalized by rating factors that are out of your hands. Or example, if you're a young driver with poor credit, you'll pay a lot for car insurance by default. Telematics — along with your good driving — may help you overcome these rating factors to receive a more favorable rate.

At the end of the day, the decision is yours. The discounts among companies will depend on their calculations and your driving performance. If you find you’re still paying too much for car insurance even with telematics, you might be with the wrong company. It’s important not to be complacent with your car insurance and shop around often for car insurance policies. It's a good idea to reassess your car insurance situation once every six months. Enter your zip code below to see how much you could save.

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Additional resources

See our additional articles for more info on how to get affordable car insurance quotes.