What is telematics?

A woman drives behind the car smiling after learning how using telematics system in her car can help save money

Telematics is a usage-based auto insurance program offered by insurance companies to reward customers for safe driving habits. By collecting information such as mileage and driving habits, insurers can offer discounts and provide personalized feedback to incentivize safe and good driving habits. Here’s what to know if you are considering telematics or usage-based car insurance.

How Telematics Can Help You Save Money on Auto Insurance

Telematics or usage-based car insurance has become popular across top insurance companies—such as Nationwide Smartride and Progressive Snapshot—as it gives you a chance to receive auto insurance discounts on your coverage. You may be able to get a discount by simply signing up for a telematics program, but the main purpose of the program is to receive a lower rate for being a safe driver. Many of the telematics apps provide personalized feedback to help you improve your driving habits and potentially lower your auto insurance rates.

Benefits of Telematics and Usage Based Insurance

Using a telematics system can give you more control over what you pay for auto insurance.  By recording the number of miles you drive, your speed and how quickly you brake, insurance companies can use real-time data to better understand their risk. This gives you a more accurate auto insurance rate, and is more based on your actual driving instead of non-driving factors like where you live and your credit score. You’ll also be encouraged to drive your car less frequently, reducing the likelihood of collision and wear and tear on your vehicle.

What to Consider About Telematics and Usage Based Insurance

Telematics or usage-based insurance programs base what you pay off of how many miles you drive, what speed you drive at and the kind of driving habits you have. If you have a lengthy commute, drive in a lot of stop-and-go traffic, or often drive at night, you may not see as many benefits from usage-based insurance. If you don’t drive often, a vehicle telematics program is definitely something to consider.

Explore Your Auto Insurance Savings Options with SelectQuote

Whether you’re interested in finding a telematics program or simply looking to save money on your auto insurance, SelectQuote can help. We can shop some of the most trusted auto insurance companies on your behalf and compare prices and coverage in just minutes. We will ensure that you understand all your options, getting you exactly the auto insurance coverage you need at the best available rate.

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