Can telematics devices help you save on car insurance?

Yes, you can potentially save money through a car insurance program that rewards safe driving through telematics devices that monitor your driving habits. The telematics device is usually an app that runs off your smartphone or a device you plug into your car, though some vehicles may come equipped with telematics that are already installed. These devices can capture data on a variety of driving activities and potentially reduce your premium, provide rewards, or result in a discount if you meet certain criteria.

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What is a telematics device?

A telematics device is typically an app that measures details such as mileage, speed, and braking time, as well as where and when you drive. Some insurers also offer a physical car telematics device that plugs into a vehicle's onboard diagnostic port under the dash. These plug-in devices can measure the same details as a mobile app. Both plug-in and app-based telematics devices need to be plugged in or enabled for them to work, but once you set them up, they simply run in the background.

How does telematics work with car insurance?

For those enrolled in telematics-based auto insurance programs (also known as usage-based insurance), these devices send personalized driving data to your insurance provider for either a certain length of time or continuously. Insurers can then use this data to offer a personalized rate or discount that factors in how safely you drive.

In most cases, the driving data from telematics devices is accessible to policyholders, allowing them to see how often they do things such as exceed the speed limit, veer outside their lane, or engage in hard braking (though not all insurers report the same driving behaviors). This information can help many drivers improve their driving habits and make safer decisions on the road.

How can telematics help me save on car insurance?

If you're already a safe driver, enrolling in a telematics-based program can result in cheaper car insurance rates by rewarding your good driving habits. Here are some of the potential insurance benefits of opting into a telematics program:

  • Lower premiums: Assuming you drive responsibly and avoid unsafe behavior, your personalized driving information can lead to lower insurance rates compared to the rates riskier drivers may receive.
  • Additional rewards: Depending on your provider, you may receive cash back, rate discounts, or other rewards based on good driving behavior.

Does Progressive offer any discounts based on telematics?

Yes, Progressive offers a discount through its telematics-based auto insurance program called Snapshot®. After enrolling, in most states, you'll get an automatic discount* followed by a personalized rate after your first policy period.

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