Want to save as much as 25% on your car insurance?

Car insurance telematics can save you up to 25% on premiums by sharing driving data, but it can also raise rates if you're a risky driver - UnSplash +

One provider even offers a try-before-you-buy option

One of the biggest inflationary thorns in consumers' side these days is auto insurance. In May alone, insurance rates were the biggest driver of inflation, sending many American car owners looking for ways to save money, while maintaining coverage.

Out of all that’s been tried, however, there’s one thing that nearly half of drivers haven’t done to lower their insurance cost: telematics. 

Telematics for car insurance is basically like having a little driving coach in your car. It uses tech like a phone app or a plug-in gadget to track how you drive – how far you go, how fast, how hard you brake, and what times of day you're usually on the road.

Why would insurance companies care? Well, they're hoping to give you a more personalized rate. If the data shows you're a safe driver (no crazy speeding or sudden braking), they might give you a sweet discount. It's like a reward for good behavior.

Some drivers have been shy about doing telematics because they think – and with good reason – that the automakers may be prying too much information from them.

However, Todd Greenbaum, CEO of Input 1, a digital billing platform for top insurance providers, told ConsumerAffairs that “Customers can see savings between 10% to 25% on car insurance premiums with telematics. Which could be even more significant for safe, low-mileage drivers.” 

But he cautions that there is a flip-side that works against you. He said that for those who have risky behaviors like rapid acceleration, speeding, hard braking, and even late-night driving, they may see an increase in costs.

Who offers telematics and what discounts are they offering?

What insurers are offering telematics and what kinds of savings might you expect? Jessica Edmondson at Insurify shared these findings:

Progressive (Snapshot)
-Average rate without Telematics - $1,752
-Telematics savings - $94 off at sign-up, $231 average annual savings
-Data collected - When you drive, mileage, driving behaviors, phone use

Nationwide (SmartRide)
-Average rate without Telematics - $2,232
-Telematics savings - 10% off at sign-up, up to 40% savings
-Data collected - When you drive, mileage, driving behaviors

GEICO (DriveEasy)
-Average rate without Telematics - $1,428
-Telematics savings - 5%–10% off at sign-up, additional savings vary
-Data collected - When you drive, mileage, driving behaviors, phone usage, route regularity, weather

Safeco (RightTrack)
-Average rate without Telematics -$1,488
-Telematics savings - 10% off at sign-up, up to 30% savings
-Data collected - When you drive, mileage, driving behaviors

USAA (SafePilot)
-Average rate without Telematics - $1,200
-Telematics savings - 10% off at sign-up, up to 30% savings
-Data collected - When you drive, location, driving behaviors, phone usage, annual hours driven, crash detection

What you need to consider regarding telematics

If you decide to take a shot at telematics, you need to know what you’re getting into, says Greenbaum. Before signing up, make sure you: 

1. Know what data is collected and how it’s used.

2. Read both the telematics provider’s and insurer's privacy policies.

3. Confirm data security and protection measures.

4. Check if data will be shared with third parties.

5. Confirm opt-out options if privacy concerns arise.

But if putting your driving under the microscope sounds iffy, ConsumerAffairs found one app – Jerry – that basically gives you a “try before you buy” trial run with telematics. 

Neima Shahidy, vice president of Products and Partnerships at Jerry, told us how that works.

"DriveShield on the Jerry app allows drivers to preview their driving performance before signing up for an insurance company’s telematics program. Insurer’s programs will then track the consumer’s driving score to help determine their insurance rate, sometimes bringing extra savings,” she told ConsumerAffairs.

"Our survey found that while many are open to sharing their driving data for perks like lower premiums, the vast majority are uncomfortable with the thought of their data being collected and shared without their explicit consent."

Shahidy's bottom line? If you're the kind of consumer who wants to stay informed and in control, make sure you ask questions about the personal data you'll be sharing with an insurer. "Programs built to avoid these concerns are the ones that will earn their trust and loyalty," she concluded.

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