Is usage-based car insurance the way to go, or is it cheaper to get traditional car insurance without telematics?
Telematics-powered auto insurance is a form of policy in which insurance companies rely on in-car tracking devices to monitor your driving habits and tendencies. These devices track your vehicle's speed, mileage, total driving time and other factors to help determine the policyholder's car insurance premiums. These usage-based insurance policies usually come with a mobile app to help you easily access real-time data relevant to your rate.
Below we take an in-depth look at usage-based car insurance, reviewing the telematics programs of popular insurance companies and listing typical usage-based insurance rate savings on a state-by-state basis.
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 — like hard braking or rapid acceleration — and your mileage to better predict your driving habits and create your premium. You’ll need to have this telematics data device in your vehicle for one standard six-month policy period before the collected data can revise your insurance premium. According to our study (full methodology), a good driver can save an average of $57 every six months by using Snapshot.
|Average Premium||Average Premium with Snapshot|
If your initial telematics testing shows any risky tendencies on the road, your premium could increase. Find more information relating to Progressive, including how to find a quote, in our review of Progressive.
Allstate’s primary 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% cashback (presumably on your premium going forward). Within the app, you can see 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.
|Average Premium||Average Premium with Drivewise|
A newer addition to Allstate’s telematics offerings, the company’s Milewise program is designed to offer savings to low-mileage drivers. Unlike most other types of car insurance, this pay-per-mile program sets a daily rate and allows you to pay for every mile that you drive, as tracked by a plug-in device.
Milewise is currently available in the following states:
For more information, consult our full review of Allstate insurance.
Signal uses a smartphone app to measure your driving behavior. Factors like hard braking, excessive speeding, time of day and mileage driven determine your discount. Farmers claims policyholders can earn a 5% discount on their premium by enrolling, with a discount of up to 15% when it comes time to renew the policy. Young drivers under the age of 25 could also be eligible for a 10% discount.
Learn more about Farmers by reading our review.
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, including 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:
See our review and get an Esurance quote.
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 you'll save may vary 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.
|Average Premium||Average Premium with SmartRide|
Designed for low mileage drivers, Smartmiles is Nationwide's pay-per-mile program. Much like other mileage-based telematics car insurance, your premium is made up of a base rate and a variable rate (the cost per mile), so what you pay month-to-month can vary depending on your driving habits.
See our review of Nationwide and get a quote.
Liberty Mutual’s telematics program, RightTrack, uses a plugin device that 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.
|Average Premium||Average Premium with RightTrack|
|$640||$448 to $608|
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.
|Average Premium||Average Premium with Drive Safe & Save|
Learn more about State Farm by reading our review.
GEICO 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.
USAA's telematics program encourages safe driving habits by awarding a discount based on a driving score, which is calculated by a smartphone app. SmartPilot factors in things like location, time of day, harsh braking, and how often the phone is handled while driving. If there are multiple drivers, the discount you receive will be based on the average of all drivers.
A 5% discount is offered for enrolling in USAA's SafePilot telematics program. The discount calculated using your driving data will be applied when the policy is up for renewal.
|Average Premium||Average Premium with SafePilot|
Learn more in our review of USAA.
Metromile offers a unique form of car insurance. While it still uses telematics and belongs in the family of usage-based car insurance, it’s closer to a pay-as-you-go or pay-per-mile form of car insurance. Metromile assigns you a base rate and calculates any additional premiums based on how many miles you drive. If your base rate is $29 and you drive 450 miles in a month at $0.06 per mile, your monthly rate would be $56.
Metromile insurance coverage is available in:
While driving less can help you save more with Metromile, traditional rating factors such as your vehicle type, age, driving history and credit score are utilized as well. While this practice is fairly standard among car insurance companies, it's not a practice used by our next company — Root.
Have more questions? View our detailed analysis of Metromile's telematics app and read our full review of Metromile to find out about their policies.
Root uses an app via your iPhone or Android to create your premium after you have taken a test drive. The more safely you drive, the lower your rates will be. Root bases your premium 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, 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.
Root is available in the following states:
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:
Noblr is currently available in:
This is a tricky question. Participation in most car insurance telematics programs is free — including the 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? That comes down to whether you drive safely or not.
On the other hand, telematics can prevent you from 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.
The discounts offered by insurance companies 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 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.
|State||Annual Discount w/ Telematics|
|District of Columbia||$15|