Telematics Insurance Discount
When you sign up for a telematics program, you’ll usually get an enrollment discount, which may be five to 10%. You will either download an app or receive a telematics device in the mail. During the first policy period, the company will collect information on your driving habits.
When it’s time to renew your policy, you’ll see whether you qualify for a discount based on your driving habits and how steep your discount will be. Some programs require you to keep the tracking device installed at all times to maintain a discount. Others track your driving habits for one policy period and apply the discount to all future periods.
To get the best discount, you generally must:
- Avoid rush-hour and nighttime driving
- Have below-average mileage
- Avoid harsh braking and cornering
- Avoid quick acceleration
Drivers who see the best discounts may include stay-at-home parents, remote workers, retirees and gentle drivers.
Disadvantages of Usage-based Insurance
Not everyone saves money with telematics insurance programs, however. Even if you are a good driver, you may not see a discount if you commute to work every day and drive an average number of miles. Similarly, if you regularly drive late at night, you might not see much of a discount, either. If you spend a lot of time as a passenger, it can also be frustrating, as some programs utilizing mobile apps to track behaviors won’t be able to tell that you are not driving. This can cause you to have to dispute much of the information your app will collect.
Moreover, telematics insurance can even increase your rate depending on the program you join. It’s easy to be categorized as a “bad driver” according to telematics programs. If you tend to accelerate quickly after stopping, slam on your brakes at red lights or on the interstate, and make midnight snack runs, you probably won’t find a great discount.
Additionally, it’s possible to lose certain discounts you had in place before starting a usage-based program. For example, if you had a low-mileage discount but drove above-average miles when enrolled in a telematics program, you could lose the low-mileage discount.
Car insurance prices are also highly dependent on location and ZIP code. Your rates could change if the telematics device sees that you regularly park your car in a location that’s different from the address on your car insurance profile.
If telematics insurance doesn’t sound right for you, keep in mind there are various different ways to save money on your car insurance premiums that aren’t necessarily based on your driving performance. Here is a look at the most common car insurance discounts on the market: