📊 Telematics at a Glance
Potential Savings
10-40%
for safe drivers
Average Savings
$150-400
per year
Drivers Using
~20%
and growing
How Telematics Insurance Works
Telematics programs monitor your actual driving behavior to determine your rate—instead of just using demographics like age and ZIP code.
What They Track
- • Hard braking events
- • Rapid acceleration
- • Time of day you drive
- • Miles driven
- • Phone usage while driving
- • Speed (some programs)
- • Location/routes (some programs)
How You're Tracked
- • Mobile app: Uses phone sensors
- • OBD-II plug-in: Plugs into car's diagnostic port
- • Built-in car tech: OnStar, connected car features
Telematics Programs by Insurer
Progressive Snapshot
Max Discount: Up to 30%
Can Rates Increase? Yes, in most states
Tracking Period: ~6 months
Tracks: Braking, acceleration, time, miles, phone use
Method: App or plug-in device
State Farm Drive Safe & Save
Max Discount: Up to 30%
Can Rates Increase? No (discount only)
Tracking Period: Ongoing
Tracks: Acceleration, braking, phone use, turns
Method: App + Bluetooth beacon
Allstate Drivewise
Max Discount: Up to 40%
Can Rates Increase? No (discount only)
Tracking Period: Ongoing
Tracks: Speed, braking, time, mileage
Method: App or device
Nationwide SmartRide
Max Discount: Up to 40%
Can Rates Increase? No
Tracking Period: ~4 months
Tracks: Miles, hard braking, acceleration, idle time
Method: OBD-II device
⚠️ The Privacy Trade-Off
Before enrolling, understand what you're giving up:
🔴 The GM-LexisNexis Scandal (2024)
GM collected driving data from 8 million vehicles and sold it to insurance data brokers without clear consent. Drivers saw surprise rate increases. FTC banned GM from sharing this data for 5 years.
What Data Can Reveal
- • Where you go (medical clinics, bars, political events)
- • When you're not home
- • Your daily routine and habits
- • Whether you're speeding (even if not causing accidents)
Common Complaints
- • False "hard brake" events (avoiding hazards counts against you)
- • Penalized for driving at "risky" times (night shift workers)
- • Phone charging flagged as "phone use"
- • Battery drain from always-on apps
Should You Use Telematics?
✓ Good Candidates
- • Low-mileage drivers
- • Daytime-only drivers
- • Smooth, defensive drivers
- • Those with high premiums seeking savings
- • New drivers building a record
- • People comfortable with data sharing
✗ Poor Candidates
- • Night shift workers
- • High-mileage commuters
- • City drivers (more hard braking)
- • Privacy-conscious individuals
- • Those in states where rates can increase
Tips for Maximizing Telematics Savings
🚗 Leave Following Distance
More space = fewer hard brakes. This is the #1 factor in most programs.
📱 Put Phone in Glovebox
Phone movement can be flagged as distraction. Stow it to avoid false positives.
🌙 Avoid Late-Night Driving
Most programs penalize driving between 12-4am. Schedule around it if possible.
📊 Monitor Your Score
Check the app regularly. Identify what's hurting your score and adjust.
The Bottom Line
Telematics can save safe, low-mileage drivers 10-40% ($150-400/year)—but you're trading your privacy for those savings. Choose programs where rates can only decrease, not increase (State Farm, Allstate, Nationwide). Be aware that your driving data could end up with data brokers. If you're a night driver, high-mileage commuter, or privacy-conscious, the trade-off may not be worth it.