As insurance premiums seem to increase frequently, it isn’t a wonder why consumers are looking for ways to lower their rates. Most auto insurance companies offer some sort of discount for safer driving that’s tracked by the insurance company.
This is why we were interested in exploring the question posed by Mary regarding the pros and cons of allowing your insurance company to track your driving in exchange for potentially lower premiums.
State Farm…provided me with a “tracker” so they can provide safe driver discounts. Am I providing too much information? I started to fill [out] info on the app but stopped. They will give me driving tips/suggestions based on the tracker. What is your opinion on this type of tracker? – Mary, St. Louis, MO
While most auto insurance companies offer some form of vehicle tracking in exchange for rewarding safe driving, the question most drivers have is whether the benefits outweigh the potential privacy concerns.
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What are insurance tracking devices?
Though Progressive was the first to introduce the drive and save program, Snapshot, in 1998, many insurance companies followed suit. Instead of plugging in a telematics device to collect driving data, insurance companies are using OnStar and apps on drivers’ mobile devices.
For State Farm, specifically, you have the option of a Bluetooth beacon in tandem with the mobile app or Drive Safe & Save® Connected Cars. State Farm is phasing out OnStar for new enrollees.
It’s important to note that there isn’t one set of metrics that all insurance companies collect or use to determine what they consider safe driving. So, if you are considering what information is collected and how your driving will be assessed, it is important to learn the specifics of your particular insurance company.
Credit: State Farm
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What information is collected?
Though each auto insurance company collects different data points, the common types of data collected include but are not limited to:
- Acceleration rate
- Drive speed
- Braking speed
- Cornering
- Phone Distraction
- Total miles driven
How do usage-based insurance programs work?
Usage-based insurance (UBI) programs, also known as telematics or “pay-as-you-drive” insurance, have gained popularity among major insurers as a way to offer personalized premiums based on individual driving behavior. These programs typically work as follows:
Enrollment: Drivers opt into the program, usually in exchange for an initial discount.
Data collection: The insurance company provides either a plug-in device for your car’s OBD-II port or a smartphone app to track your driving.
Monitoring period: Your driving is monitored for a set period, often 3-6 months.
Data analysis: The insurer analyzes the collected data to assess your driving habits.
Premium adjustment: Based on the analysis, your premium may be adjusted. Safe drivers often see a reduction in their rates.
Different insurers offer various programs with unique features:
State Farm’s Drive Safe & Save®: Uses a mobile app with a Bluetooth beacon or built-in telematics in select vehicles.
Progressive’s Snapshot: One of the pioneers in UBI, offering both a plug-in device and mobile app option.
Allstate’s Drivewise: Uses a mobile app to track driving behavior and offer rewards.
Geico’s DriveEasy: A mobile app-based program that monitors driving habits.
Liberty Mutual’s RightTrack: Offers a choice between a plug-in device or mobile app.
It’s important to note that while these programs can lead to significant savings for safe drivers, they may result in higher premiums for those deemed higher risk. Additionally, availability and specific features can vary by state due to differing insurance regulations.
Before enrolling in any UBI program, carefully review the terms and conditions, paying special attention to what data is collected, how it’s used, and how it might affect your premiums in both the short and long term.
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What are the car insurance privacy concerns?
It isn’t just the type of collected information that is a privacy concern. Many insurance companies have privacy policies that allow them to share your data with third parties. While State Farm says that it will not sell your Drive Safe & Save® data, it does share some information with third parties.
Data sharing associated with Accident Assistance for Drive Safe & Save® is with the driver’s consent and intended to enhance the customer experience. For example, if needed, State Farm may share the vehicle location with a tow company and law enforcement if you are in a disabled vehicle. Additionally, if you are in a car accident, your insurance company may use your tracking data to assist with a claim.
Your idea of safe driving may differ from your insurance company’s. Some drivers have even seen their rates rise after using drive-tracking programs. It’s not just the insurance company that may have access to your driving information. With State Farm, named policyholders can see all trips recorded on all devices for the last 30 days.
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What are the benefits?
While the specific amount of discount depends on the insurance company and driver, State Farm, for example, currently claims that those enrolled in their ‘Drive Safe & Save®’ program can initially save 10% for enrolling in the program with up to 30% discount possible.
It is important to note that the percentage you can save may be capped in certain states, such as New York, where the discount is capped at 30%. This program is unavailable in states such as California, Massachusetts, and Rhode Island. If you don’t drive much and drive safely, it can be a way to reduce your payments with your auto insurance company. With data being logged about your driving safety, it can be a great learning tool to accurately assess your driving habits.
Kurt’s key takeaways
Mary was spot on in pausing to contemplate the benefits and potential problems of allowing your driving to be tracked by your insurance company. It’s important to weigh the potential benefits, such as possible discounts, against these privacy concerns. If you feel any discomfort or concern about the data they are collecting and how it is being used, this program offered by your insurance company might not be right for you. If you are already using a tracker and are uncomfortable, you should contact your insurance provider for guidance on removing the feature or app and your associated data.
Remember, it’s always crucial to read and understand the terms and conditions before using any app, especially those that collect personal data. It’s your data, and you have the right to know how it’s being used.
Are you part of any insurance tracking program? Do you feel the benefits outweigh the privacy concerns? Let us know by commenting below.
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11 comments
I was going to sign up but “practicing ” the slow acceleration and braking were very difficult and encourages running yellow lights. Also if your driving history is shared with the insurance industry, you can expect higher rates if your metrics are not perfect. Opted out and paying the non-discounted price.
Bill H
People fall into data tracking automatically at the time of purchase – snuck into paperwork at dealers, and there is no choice unless you demand it be removed. That info is shared with the data world and will cost you money. Regular dealer paperwork and financing and warranty paperwork. It is a trap, you must demand it be removed and not allowed to be shared. Manufacturers, Insurance Co, Warranty, Financing – it is much safer to ban and refuse any data, verified. Cars have been tracking devices for many years now. AND DEALERS, FINANCE, Insurance, and anyone with the ability to sell data – MUST BE REQUIRED TO DISCLOSE VERBALLY AND REQUIRE SIGNED DISCLOSURE OF THE INTENT TO DISCLOSE
Statefarm app showed me driving on the wrong side of the road and jumping the curb twice while making a left turn. I also was dinged for unsafe braking when a driver ran a stop sign in front of me. Even worse my agent wouldn’t remove me from the program.
There is ZERO reason to join this program. Insurance companies are not to be trusted; they will use your data against you. Nobody drives perfectly, especially when in an unfamiliar area or when defensive driving is needed.
I had signed up for Snapchat with Progressive and I was going to be using the app but what I discovered with the app is that it sent data anytime you’re moving faster than 7 miles an hour and it goes under the assumption that you are driving in your car it does not differentiate whether I am on my bicycle in an Uber on an airplane on a boat on a train which I was within the last month and having started the application process with progressive when I discovered that they were gathering misinformation that had nothing to do with my driving and we’re going to use this information as part of my driving record and determining my rate I pointed out to them that their app is extremely flawed. It is not collecting data on my driving pattern. It’s just collecting data on my movement. I remove myself from the program and now I have asked him to send me the actual device that you put in your car and will only track while you are in your car. The app is a complete failure and people that are using it to have them determine what the insurance rate should be should be aware. No one informed me of this information until I discovered all of this on my own. I was never told anything about the 7 miles an hour limit. There was so much information that was held back at the time other than they were trying to tell you I would benefit from it. I really wonder what they’re thinking at progressive
Bad enough that government wants to nanny state and track every move you make, I’ll do without it, thank you.
I have been using State Farm’s Safe Driving program for about three months. The big problem I have is that when I adhere to the speed limit, especially in 25 mile an hour zones, other “unsafe” drivers are riding my bumper until they reach a higher speed zone, then whiz around me like a bat out of hell, frequently extending their middle finger as they do. I’ve talked to a few other people with safe driving programs and we usually agree that they may save money, but they are also unsafe because other drivers don’t respect you following the speed limit and often get upset because you’re going so slow
I’m considering opting out of the program and paying the full price instead of having to worry about offending some cuckoo with a gun who might decide to blast me as he passes me, just because I’m following the speed limit. I’m definitely going to call this to the attention of my State Farm agent.
I have Geico drive wise and it stinks! I started off with the highest score for excellent driving. Every time I drive, my score lowers. They state on the app that I keep “hard braking ” and going around curves too fast. I live on Long Island, and the roads are very, very curvy, not to mention constant braking. But, I never ever “hard break!” Never go around curves while “speeding!” Plus, they lower the rates if you take the same routes, or don’t use the highway to keep a steady speed for a certain amount of driving time. I am a disabled older lady that only goes to the same doctors and only to the same grocery store. What am I supposed to do? No where I go requires a major highway, nor can i change my routes. Plus, it lowers your score if you stay home often. I don’t go out often due to disability, only for what I stated above. That is seriously unfair.
I contacted them, they stated I needed the app to track me for 45 days to determine my discount. I disabled it a few times, and it never stops bothering me to turn it back on. Very annoying feature.
I am thrilled with my very low rate (left Allstae for insanely higher rates), but unhappy with how they say I drive when I know I drive perfectly. I used to be a driving instructor many years ago.
Unhappy with that feature, but it will not leave me alone if I disable it, as stated already.
dont allow this at all!!
I decided to try the beacon that State Farm provides to save money. Since I’m retired and don’t drive as much as I used to, it has saved me money that adds up to about $20 a month on a six month plan. I feel like it has made a better driver out of me so am sticking with it for now. The only thing they have gotten me for is for braking and I have improved so don’t get that much anymore.
I have the State Farm Drive Safe and Save program and I LOVE it. I live in a small city area that is 400,000 people, that spans Iowa and Illinois. Drive Safe and Save saves me $225.00/ per 6 month, or $450 per year. Yes, I have people pull out in front of me etc. I follow the speed limit pretty well. They do give you an 8mph window on speed. My agent told me that I am one of the highest savers in the area. By now they know my driving habits. The main thing I have learned is leaving early so that you can relax on your drive helps!
They know my driving habits well enough that they do nut punish me when I have to accelerate quickly or hard brake when there is the occasional need. I don’t find it makes me drive like too slowly, just smoother.