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.

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

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.

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

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, with 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.

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 Arizona, 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 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:

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, California, Colorado, Connecticut, Delaware, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia.

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.

Another telematics-driven option for auto insurance is Noblr, which calculates part of your premium based on driving data collected by a smartphone app. Your total premium is the sum of two rates — a fixed monthly rate, determined by some of the usual rating factors insurers use, like your age, location, and vehicle, and a monthly variable rate, which is provided by the app.

The Noblr app measures how safe of a driver you are by scoring your driving abilities using these metrics:

• Smoothness: how hard you brake or accelerate
• Focus: how you use your phone while driving
• Road choice: using highways over local roads is considered to be safer
• Time of day: driving at night is riskier than driving during the day
• Mileage: how far you drive

Noblr is currently available in Arizona, Colorado, Ohio, and Texas.

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.

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