How Do Those Car Insurance Tracking Devices Work? B2
How Do Those Car Insurance Tracking Devices Work?
Car insurance rates are based on several factors, including how you drive. Initially, insurers had to rely on your driving record to understand your behind-the-wheel habits. But that all changed with the introduction of car insurance tracking devices. These devices, which are placed in your car or accessed via a smartphone app, allow insurers to monitor your driving habits and determine rates that more accurately represent your risk.
If you’re looking for the cheapest car insurance rates, you may have come across one of several usage-based insurance programs that utilize car tracking devices. These programs are becoming increasingly popular as they may translate to cheaper car insurance rates for safe drivers or drivers who aren’t on the road often. But is a car insurance tracking program right for you?
Before you decide, it’s important to understand how these devices work, what information they track, and how it affects your rates.
What Is an Insurance Tracker?
An insurance tracker is a telematics program that collects data about your driving habits. There are two main types of auto insurance trackers available. The first is a physical telematics device, also known as a dongle, that is installed or plugged into your vehicle. The second is an app that you can download onto a smartphone. The one you use often depends on your insurer and the program you choose.
Regardless of which you choose, your insurer will use the device to collect specific information about your driving habits. Typically, insurers provide the device as part of a usage-based insurance (UBI) program. Once installed, the insurer will use it to collect key metrics, like speed, braking, and mileage, to determine a highly-personalized premium.
Progressive’s Snapshot program was the first in the United States, but other insurers have followed suit. Today, consumers can choose between several driving tracking programs, including Drivewise by Allstate, DriveEasy by Geico, and Drive Safe & Save by State Farm.
These tracking programs are not required; you have to opt-in and use the dongle or app to track your driving. If you don’t save any money with the program, you should be able to opt-out again without an issue. Keep in mind that each insurer has its own program rules and restrictions, and you should contact them if you no longer want to participate. Unplugging the device or not using the app can alter your premiums or cancel any discounts.
How Does It Actually Work?
How an auto tracking device works depends on the equipment your insurer uses.
If your insurer uses a stand-alone device, it’s typically plugged into your onboard diagnostic (OBD-II) port, which is commonly found beneath the steering wheel. This method relies on your car’s onboard diagnostic system and a network of sensors that tracks key performance indicators like fuel and oil levels, mileage, or tire pressure. Once installed in the OBD-II port, the device can collect information about where and how far you drive, your speed, and your breaking patterns, among other things.
If your insurer relies on a mobile tracking device, all you have to do is download the app, follow your insurer’s instructions, and start driving. The smartphone app uses the sensors built into the phone to gather data on your driving. It doesn’t have direct access to information gathered from your vehicle’s OBD-II port, but it can detect behaviors like sudden acceleration and hard braking.
Regardless of which method your insurer uses, the information collected is typically encrypted and sent to the insurer. The data will be used to evaluate your driving habits and determine your rate and any other discounts or program benefits you are eligible for.
What Data Is Tracked?
Most insurance companies that offer tracking programs disclose what data is collected. You can typically find the information on their website or by contacting an agent. Generally, they’re looking for information that illustrates your usual driving habits, particularly habits that could lead to accidents or help you avoid them.
Typical data collected includes:
- How often you drive and for how long
- Hard braking
- Hard acceleration
- Speed
- Fast cornering (quick, sharp turns)
- Time of day, especially nighttime driving
- Phone usage while driving
When the insurance company receives this data, they will use mapping data to see what kinds of traffic controls, such as stop signs and speed limits, are in place where you were driving. In doing so, they can determine if you’re a safe driver who follows the rules of the road, or if you frequently speed, run stop signs, or otherwise have poor driving habits. Depending on the program and tracking method (i.e., plug-in dongle or mobile app), they may also be able to tell if you were using your phone while driving, a habit that is generally labeled as “distracted driving.”
Your insurer will use this data to set your rates, but the information collected can also be useful to you. Smartphone apps often include a dashboard and feedback so you can see how you’re driving. If you see a lot of quick starts and distracted driving, you can adjust your behavior to improve your driving and, potentially, your auto insurance rate.
Do I Need an Insurance Tracker?
Drivers aren’t required to use these telematics systems or trackers, but there may be times when they make sense for you. That’s especially true if you want to take advantage of specific programs offered by your insurer:
Usage-based Insurance (UBI) programs establish rates based on how you use your car. If you’re a generally safe driver – you don’t speed, aren’t prone to hard braking, and stay distraction-free – you may find that UBI programs reduce your rates. UBI programs may also be useful for drivers who aren’t behind the wheel often.
Some insurers also offer pay-per-mile insurance. With this type of coverage, your insurer will use a tracking device to monitor the number of miles you drive over a period of time, typically four weeks. In return, you pay a base rate for insurance and an additional per-mile rate, often resulting in lower monthly premiums when compared to traditional coverage. If you work from home, have a short commute, or simply aren’t behind the wheel often, then a pay-per-mile plan can help you avoid overpaying for insurance.
Several insurers, including Geico, USAA, and State Farm, offer usage-based insurance programs, but fewer offer true pay-per-mile or pay-as-you-go programs that exclusively link your rate to mileage. If you’re looking for a mileage-based insurance program, then you may want to consider Milewise by Allstate. There are also a handful of insurers, including Mile Auto and Metromile, that specialize in pay-per-mile coverage.
Looking for affordable car insurance? Check out the Cheapest Car Insurance Companies of 2023 rating.
Who Offers Insurance Trackers?
Most national insurance companies offer tracking-based insurance but programs vary. Many of the insurers below offer usage-based insurance programs that reward you for safe driving. However, each company may use the data they collect in a different way, so it’s important to ask what information is collected and how it impacts your rate.
- Allstate: Drivewise
- American Family: KnowYourDrive
- Farmers: Signal
- Geico: DriveEasy
- Nationwide: SmartRide
- Progressive: Snapshot
- State Farm: Drive Safe and Save
- Travelers: IntelliDrive
- USAA: SafePilot