You enroll in a program that tracks your driving, expecting to save money on car insurance. The data from the Maryland Insurance Administration shows that only 31% of drivers who signed up actually saw their premiums decrease. Another 24% saw their rates go up, and 45% saw no change at all. That means for every ten drivers who hand over their driving data, roughly seven either break even or pay more.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
Insurance companies are pushing hard to make driver behavior monitoring the new normal. Over 20 million U.S. drivers are already enrolled in these programs, and that number keeps climbing. But the gap between what insurers promise and what drivers actually experience is wider than most people realise. The way programs are structured, what data they collect, and whether they can raise your rates all vary significantly from one company to the next. Knowing those differences matters more than just having a clean driving record. Here’s what you actually need to know.
Four Things to Know About Usage-Based Insurance Before You Sign Up
Usage-based insurance, also called telematics insurance, is a system where an insurer tracks your actual driving behaviour through a smartphone app, a plug-in device in your car, or embedded factory technology. The idea is that your premium should reflect how you drive, not just broad categories like your age or where you live. What I tend to notice is that people focus on the potential savings and skip the fine print about how the data gets used. The difference between a program that rewards safe driving and one that penalises mistakes comes down to the details of how mileage and driving behaviour are measured.
How Different Telematics Programs Compare on Discounts and Surcharges
The biggest difference between programs is whether they can only offer discounts or whether they can also raise your rates. This single feature changes the entire risk calculation. A program that caps the downside at losing a discount is very different from one that could add a surcharge to your premium. The table below shows how the major U.S. programs stack up based on the most recent data.
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| Program | Max Discount | Surcharge Possible | Collection Method |
|---|---|---|---|
| Snapshot (Progressive) | 30% | Up to 20% increase | OBD-II or app |
| Drive Safe & Save (State Farm) | 30% | No surcharge | OnStar or mobile app |
| Drivewise (Allstate) | 40% | No surcharge | Smartphone app |
| SmartRide (Nationwide) | 40% | No surcharge | OBD-II device |
| IntelliDrive (Travelers) | 30% | Up to 30% increase | Smartphone app |
Notice that the programs with the highest potential discounts—Allstate and Nationwide at 40%—are also the ones that do not impose surcharges. Progressive and Travelers offer lower maximum discounts and can increase your rates if your driving data shows risky behaviour. The difference matters at renewal time. If you accidentally trigger hard braking events or drive late at night, a discount-only program simply reduces the discount you get. A two-way program could raise your premium above what you were paying before you enrolled.
What that means in cash terms: if your current annual premium is £1,200, a 40% discount from a top program could save you £480. But if you end up in the 24% group that gets a surcharge, a 20% increase adds £240 to your bill. The potential upside is real, but so is the downside. Programs like Progressive Snapshot also weigh late-night driving heavily—trips between midnight and 4 a.m. carry three times the fatal crash risk, so any driving during those hours will hurt your score. A dash cam with GPS tracking can help you review your own driving patterns before you enrol, so you have a clearer picture of what an insurer will see.
Where Telematics Insurance Programs Catch Drivers Off Guard
The Consent Loophole in Third-Party App Data
Not all driving data comes from an insurer’s own app. Allstate’s subsidiary Arity built a second pipeline by embedding tracking software inside popular apps like Life360, GasBuddy and Fuel Rewards. The Texas Attorney General’s January 2025 lawsuit alleged that consumers unknowingly downloaded the tracking software when they installed those apps. Arity collected trillions of miles of location data from more than 45 million Americans. The practical lesson: an app you already use may be feeding data to insurers without you realising it. Review the permissions on your phone and check whether any of your installed apps share data with third-party data brokers.
The Misunderstanding About Who Owns Your Data
General Motors settled with California regulators for $12.75 million in May 2026 over allegations that it sold driving and location data from hundreds of thousands of drivers to LexisNexis Risk Solutions and Verisk Analytics between 2020 and 2024. GM made roughly $20 million from those sales. OnStar collected location data from some drivers as often as every three seconds. One driver’s LexisNexis report ran 258 pages and logged 640 individual trips, with start and end times, distances, speeding events, hard braking and fast acceleration. The settlement includes a five-year ban on sharing geolocation and driver behaviour data with consumer reporting agencies. Before enrolling in any telematics program, ask your insurer directly whether your data is shared with brokers or sold to third parties.
The Gap Between Self-Reported and Verified Savings
National consumer surveys put the percentage of telematics enrollees who see lower rates at 48%. The Maryland Insurance Administration’s verified renewal data covering over 260,000 policies puts the figure at 31%. That is a 17-point gap between what people report and what actually happens. Self-reported surveys tend to attract people who had positive experiences, while the verified data includes everyone. The 31% figure is the more reliable one to use when deciding whether to enrol. A roadside emergency kit is a more predictable investment than a telematics discount that may or may not materialise.
Making Sense of Telematics Insurance: What to Check Before Enrolling
Know Whether Your Program Is Discount-Only or Two-Way Pricing
This is the single most important question to answer before you sign up. Discount-only programs, offered by State Farm, Allstate, Nationwide, American Family, Farmers and USAA, mean your premium cannot go above what you were paying before enrolment. If your driving score is poor, you simply lose the discount. Two-way pricing programs from Progressive and Travelers can increase your premium above your starting rate. The difference is not always obvious from the marketing language. Ask directly: “Can my rate go up based on the data collected, or is the maximum downside that I don’t get a discount?”
Check What Data Is Collected and How Long It Is Kept
Telematics systems can track speed, hard braking, rapid acceleration, cornering, time of day, miles driven, phone use while driving, trip start and end locations, idle time, turn signal use and altitude. App-based programs collect the most data because they combine trip detection, phone sensors, route data and phone-use signals. Some require 24/7 location access on your smartphone. Plug-in OBD-II devices avoid phone-level permissions but still record core driving behaviours. Ask your insurer for a data retention policy and whether you can request deletion of your data when you leave the program. An anti-theft steering wheel lock protects your car physically, but nothing protects your data except the terms you agree to.
Review the Scoring Model Before You Enrol
Each insurer weights driving behaviours differently. Progressive Snapshot puts heavy weight on hard braking and late-night trips between midnight and 4 a.m. Travelers IntelliDrive considers a broader set of factors including phone distraction. If you regularly drive late at night for work, a program that penalises nighttime driving will cost you more than one that does not. Under California’s proposed AB 311, insurers would be required to provide scoring models, algorithms, variables, weighting factors and validation studies to the Insurance Commissioner, though some proprietary materials may remain confidential. In other states, that information is harder to get. Ask for a breakdown of what factors matter most in the scoring before you commit.
The Future of Telematics and What It Means for Current Drivers
By 2027, McKinsey projects that more than 60% of new U.S. vehicle sales will share driving data directly with insurers through embedded factory systems. Global auto insurance rates surged 14% between 2024 and 2026, and telematics is becoming the default pricing model rather than the exception. At the same time, regulatory pushback is growing. California, Hawaii and Michigan prohibit telematics surcharges entirely—discounts only. The NAIC is developing updated telematics model guidelines, and studies have flagged that nighttime driving penalties disproportionately affect low-income essential workers. The trend is clear: more data sharing is coming, but the rules around it are still being written. If you enrol now, pay attention to how the program handles data deletion and rate changes. A 360-degree dash cam with night vision gives you your own independent record of driving events, which can be useful if the insurer’s data ever conflicts with your memory of what happened.
Frequently Asked Questions About Driver Behavior Monitoring Insurance
Can my insurer raise my rates based on telematics data in every state? ▾
What happens if I unenroll from a telematics program mid-policy? ▾
Does telematics data affect my credit score or insurance score? ▾
If I drive fewer than 8,000 miles a year, should I look at pay-per-mile insurance instead? ▾
Can I see the data my insurer has collected about my driving? ▾
Does having a dash cam affect my telematics score? ▾
The Bottom Line on Trading Driving Data for Insurance Savings
Driver behaviour monitoring is not a simple trade where good driving equals lower rates. The data shows that most people who enrol do not save money, and a significant minority end up paying more. The real question is whether the potential upside is worth the data privacy trade-off and the risk of a rate increase. As embedded telematics becomes standard in new vehicles and regulatory frameworks continue to shift, the choice to opt in or opt out will only become more complicated. The best approach is to go in with your eyes open, knowing exactly what data is collected, whether your rate can go up, and what happens to your information if you leave the program.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Understanding Liability-Only Coverage for Your Car Insurance.
Sources and Further Reading
Maximize Your Savings with No-Claim Discounts in Car Insurance — How no-claim discounts work alongside telematics programs and which one typically saves you more.
Road Trip Ready: Car Insurance Essentials for Your Next Adventure — What to check in your policy before a long trip, especially if you use a telematics program that tracks mileage and late-night driving.
Maryland Insurance Administration (2025). Telematics Survey Report. 🔗
CalMatters (2026). California bill would let drivers trade personal data for potentially lower insurance rates. 🔗
MoneyGeek (2026). Driving Data and Insurers: Privacy Risks. 🔗
The Insurance Scout (2026). Usage-Based Auto Insurance and Telematics. 🔗
