Car Insurance with Telematics

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

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Cheap car insurance with telematics

The use of telematics in auto insurance is a growing trend. In these usage-based insurance plans, insurance companies rely on telematics devices to monitor driving habits and tendencies, tracking drivers' speed, mileage, and total driving time to more accurately determine car insurance premiums. Safe drivers get cheaper auto insurance with telematics. Let’s compare telematics programs of popular insurance companies.

Telematics auto insurance programs — major companies
  1. Progressive
  2. Allstate
  3. State Farm
  4. Esurance
  5. Nationwide
  6. Liberty Mutual
  7. Metromile
  8. Root Car Insurance
  9. GEICO
  10. Is it worth it?
  11. Telematics discount by state

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 PremiumAverage Premium with SnapShot

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 PremiumAverage Premium with Telematics

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 PremiumAverage Premium with Telematics

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 PremiumAverage Premium with Telematics

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 PremiumAverage Premium with Telematics

Metromile telematics

Metromile is a very unique form of car insurance. While it still uses telematics and belongs in the family of usage based car insurance, it’s much more of a pay-as-you-go or pay-per-mile form of car insurance. Basically, you have a base rate and then your premium is calculated based on how many miles you drive. So, if your base profile is $29 and you drove 450 miles that month at 6 cents per mile, your monthly rate would be $56.

In this sense, you’re charged based on how many miles you drove the previous month and thus you’re stuck to a monthly billing system. Which, for most drivers, is pretty standard. Metromile is available in California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.

The caveat for Metromile comes from the how their base profile is calculated. While driving less can help you save more, traditional rating factors such as your vehicle type, age, driving history, and credit score are utilized as well. While this is pretty standard for car insurance companies, it's not a practice used by our next company - Root.

Root Car Insurance

Root is relatively new to the game of car insurance as well as the idea it employs. Basically, Root uses an app via your iPhone or Android to create your premium after you have taken a test drive. In theory, the safer driver you are, the better your premium will be. To them, your premium should be based on how you drive, not your age, credit score, or any non-driving rating factors commonly used by standard insurance companies.

Like other telematics programs we have seen, Root uses the following driving behaviors to calculate your premium:

  • How you brake
  • Speed of turns
  • Mileage
  • Time of day in which you drive (with late night driving being less favorable)

In their eyes, the only way to see if you’re getting a better insurance rate is to take a test drive and get a quote. In theory, if you’re a safe driver but your insurance rate is being penalized by non-driving factors, this might be a good opportunity for you to save money.

Currently, Root is only available in the following states: Arizona, Arkansas, Delaware, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Texas and Utah.

GEICO DriveEasy

GEICO’s DriveEasy uses your smartphone to help you become a better driver. To participate, download and log into the DriveEasy app. The app uses your phone’s sensors and GPS location to collect information about driving habits such as hard braking, speeding, and phone use while driving.

Other factors — like the time of day at which you drive and your overall mileage — are counted as well. The app’s movement-tracking technology can even determine whether or not you are the driver or a passenger. With the collected data, GEICO will give you an overall driving score and tips to help you improve your driving.

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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