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Want to save money on car insurance by being a safer driver? Telematics car insurance plans make it possible — if you share driving data. See how! [[{“value”:”
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Do you ever feel powerless against the ever-rising price of car insurance? Auto insurance prices went up by about 20% in 2023, and higher costs of car repairs and car parts mean that the cost of insuring your vehicle might not slow down anytime soon. One way to counteract the trend of rising car insurance prices is to take the power into your own hands — with telematics car insurance.
Telematics is a special kind of car insurance where you can get rewarded for safe driving. You sign up to share your driving data, and based on your driving habits and behaviors, the insurance company might give you a discount on car insurance. Instead of just helplessly watching as your car insurance rates go up, telematics can help you take control of your premium. Some of the best insurance companies with telematics offer safe driving discounts of up to 30% to 40%.
However, some people are unfamiliar with telematics or are reluctant to share their driving data. Let’s look at a few of the potential upsides and downsides of telematics car insurance and whether this unique way to save could be right for you.
Three reasons why you don’t want telematics car insurance
Even if you’re sick and tired of paying higher prices for car insurance, you might have concerns about signing up to share driving data. Here are a few reasons why you might not want telematics car insurance.
1. “It’s too much hassle to share driving data.”
Most car insurance companies‘ telematics programs require you to sign up via mobile app and use the app to track some of your driving behavior. Other programs might send you a telematics device that plugs into your car or attaches to your windshield and communicates with your mobile app via Bluetooth.
Concerns about data privacy have grown in recent years, as many people wonder if we’ve gone too far in handing over our personal data to corporations. Although the insurance companies say they have made every effort to make the process simple and seamless, you might just not feel like signing up for another data-sharing situation. If telematics feels too intrusive, maybe it’s not the right choice for you.
But if you trust your car insurance company, you’re tech-savvy with mobile apps, and you don’t mind sharing some driving data with your insurer, getting a discount on car insurance could be worth the effort.
2. “I don’t want my insurance company messing with my phone.”
Some telematics programs track a larger variety of data than others. Allstate Drivewise® only measures your driving speed, stopping speeds, and times of day when you drive. But other programs like State Farm Drive Safe & SaveTM track a wider range of data, like watching for signs of distracted driving.
To some people, this just might feel too invasive. Of course, distracted driving is not good; it’s a cause of many car crashes — but you might not want your insurance company tracking your every move behind the wheel. And not every insurance company’s telematics insurance app has been well reviewed. Interestingly, most insurance companies’ iOS apps tend to get higher reviews than Android apps.
Some app users (across multiple insurance companies) have complained about excessive notifications, tracking errors, and battery draining. Read the fine print and check customer reviews to see if telematics car insurance is likely to work well with your phone.
3. “What if my insurance rate goes up?”
Some companies offer a special discount just for signing up for telematics car insurance, but beyond that, there are no guaranteed discounts. Some insurance companies (like Progressive and Allstate) might raise your premium if you have risky driving behaviors.
Five reasons why you should try telematics car insurance
It’s true that telematics car insurance is different from traditional policies, and it can bring a few extra hassles and risks. But here are some good reasons to try it in 2024.
1. Telematics puts you in control of your rates
Car insurance price increases often feel unfair. Even if you’re accident-free, your premium could still go up. Instead of getting punished for everyone else’s car crashes, speeding tickets, and expensive-to-repair cars, telematics car insurance empowers you. If you’re a safe driver, show your insurance company why you deserve car insurance discounts.
2. You could become a better, safer driver
Along with reducing your insurance costs, what if telematics could actually improve your driving? Several insurance companies’ apps offer fun driving insights and safety challenges, where you can turn your everyday commute into more of a game and get rewarded for safer driving habits.
3. Some companies promise not to raise your rate
Nationwide and State Farm are two of the companies that promise not to raise your premium if you use telematics. Your discount might be $0, but your rate won’t go up.
4. Connected vehicles make it easy
If you have a newer model connected vehicle, it’s easy to get telematics insurance. Ford Insure, GM OnStar Insurance, and Tesla Insurance all offer the chance of getting discount car insurance right within your car — no extra effort or devices or apps required!
5. If you don’t like it, you can quit
Telematics car insurance is not a lifetime commitment. If you don’t like the app or you don’t get the discounts you’d hoped for, you can always go back to a traditional policy.
Bottom line
Americans are frustrated by high inflation, high interest rates, and a disappointing “vibecession” economy. Taking control of your car insurance by trying telematics could help you save big money in 2024.
Our best car insurance companies for 2024
Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Progressive. The Motley Fool has a disclosure policy.
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