If your insurance rates are through the roof and you’re looking for relief, the best usage-based car insurance policies may be able to help. These policies adjust your premiums based on your driving patterns.
The safer you drive, the less you pay for insurance.
This type of policy is offered by some of the biggest names in auto insurance, as well as smaller, lesser-known companies. Let’s take a look at some of the most widely available options.
What Is Usage-Based Car Insurance?
Usage-based car insurance, also referred to as UBI is a discount program or policy that rewards safe drivers with lower insurance rates. This can come in the form of lower premiums, higher discounts, payment credits, etc.
Usage-based car insurance systems typically use an app on your phone to monitor your driving and record information about the way you drive.
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What Information Do Usage-Based Car Insurance Programs Gather?
The information that is gathered for UBIs is referred to as telematics. This can consist of:
Driving speed
Acceleration
Braking
Time
GPS location
Several insurers also collect data on phone usage.
While privacy can be a concern with the data collected, insurance companies do not share this data beyond settling claims or compiling with requests from law enforcement. Think about it this way: if the insurance company released the data, their competitors could access it, and they’d lose their advantage.
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Who Is It Best For?
UBI programs are often best for those who don’t usually qualify for rate discounts. This includes those who are very young, old, have bad credit, or have a poor driving history.
These programs can also benefit single drivers (no multi-driver discounts) and those who don’t drive much (less driving equals safe driving).
These programs are not well suited to bad drivers, i.e., those who speed, brake hard, etc. Additionally, these programs can be a poor choice for those who drive at night, drive a lot, drive during rush hour, or are technology-averse.
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Best Usage-Based Car Insurance Policies
BEST FOR LOCKED-IN DISCOUNT
Liberty Mutual – RightTrack
Best For Locked-in Discount
The biggest advantage of the RightTrack program offered by Liberty Mutual is the locked-in discount. Once you complete your 90-day evaluation, the discount you earn is locked in.
You will retain your percentage-based discount for the life of your policy with Liberty Mutual. Even if you get a new car, the discount will remain. No re-evaluation is necessary.
Pros:
Automatic enrollment discount
Discount locked in for life
Cons:
Bad drivers are penalized
Varying terms in different states
Quick Facts
Evaluation period 90 days
Discount 10% – 30%
Minimum device requirements Android 7.0, iOS 14.0
App store reviews 4.6 Goolge , 4.8 Apple
Driving information collected
Minimum discount amount
When the discount is applied
Additionally, depending on which state you reside in, you may be forced to have all drivers on your policy sign up for RightTrack.
What Information Does RightTrack Gather?
Braking
Acceleration
Night-time driving
Rush hour driving
Low-speed driving
Distracted driving (phone usage)
This information makes up your RightTrack score. You can view this information on the app and update it as needed (i.e., change driver).
You receive a 10% discount when you enroll, and your driving is tracked for 90 days. After this, your RightTrack score will determine your new discount. This discount is locked in for life.
Visit RightTrack
BEST FOR IMPROVING YOUR DRIVING HABITS
Nationwide – SmartRide
Best For Improving Your Driving Habits
SmartRide by Nationwide is a program that continuously monitors your driving habits; as long as you have a policy, the app will monitor your driving.
The upside here is the incentive to improve your driving habits. You receive personal feedback on your driving and an estimated discount updated weekly. So, if you have a bad week, you have time to improve your discount.
Pros:
Rewarded for improving your safe driving
Personalized driving suggestions
Cons:
All drivers have to enroll
You are monitored forever
Quick Facts
Evaluation period 4 – 6 months (as quick as 80 days)
Discount 15% – 40%
Minimum device requirements Android 6.0, iOS 12.0
App store reviews 4.5 Google , 4.6 Apple
The RightTrack dashboard will update weekly with your potential policy discount based on your driving. Your discount is applied at policy renewal.
What Information Does SmartRide Gather?
Miles driven
Hard braking
Acceleration (in excess of 7.7 miles per second)
Nighttime driving (midnight to 5 am)
The initial evaluation period can be as short as 80 days or up to 6 months, depending on how often you drive. This information is used to calculate your new discount.
Your driving habits are monitored for the life of your policy, and your discount can change each renewal period accordingly.
Visit SmartRide
BEST FOR NEW CUSTOMERS
Progressive – Snapshot
Best For New Customers
If you have insurance with another company and are looking to switch, Progressive Snapshot offers some unique incentives.
You can try out the insurance before you switch using the 30-day Road Test program. This can give you a preview of what kind of discount you might qualify for.
Plus, as a new Progressive customer, you’ll receive an automatic enrollment discount that applies until your next policy renewal period.
Pros:
Enrollment discount
Try before you buy
Cons:
Penalized for bad driving
Your driving is continuously evaluated
Quick Facts
Evaluation period Your policy period (6 or 12 months)
Maximum discount $94 – $231*
Minimum device requirements Android 7.0, iOS 13.0
App store reviews 3.6 Google , 4.4 Apple
* discount range based on average savings at sign-up and average savings after 6 months
Using the Progressive app with Snapshot, you can track your driving stats, view your discount, and view customized safe driving recommendations.
What Information Does Snapshot Gather?
Mileage
Hard braking
Acceleration
Late-night driving (midnight – 4 am)
Phone activity (certain states only)
Your driving habits are monitored for the life of your policy, and your discount can increase or decrease for every policy renewal period if your driving habits change.
Visit Snapshot
BEST FOR THOSE WITH BAD CREDIT
Root Car Insurance
Best For Those With Bad Credit
All of Root’s auto insurance policies are based on driving habits. All policyholders are tracked, and rates are customized to your driving.
This is especially useful for those with bad (or no) credit. Insurance companies often penalize you for poor credit if they insure you at all. Root weighs driving history more heavily and is even working towards dropping credit scores from their calculations soon.
Pros:
Try before you buy
Doesn’t look at credit
Cons:
Won’t insure bad drivers
Continuously monitors your driving
Quick Facts
Evaluation period As little as 3 weeks
Discount Average $900 in savings a year
Minimum device requirements Android 5.0, iOS 14.0
App store reviews 3.4 Google , 4.7 Apple
Through the Root app, you get access to your driver scorecard that details your driving behavior and what steps you can take to improve it.
What Information Does Root Gather?
Root , your initial 3+ week evaluation will begin. According to Root’s website, they will track information “such as braking, speed of turns, driving times, and route consistency.”
You’ll receive your customized rate quote at the end of your evaluation. Your driving habits will continue being monitored for the life of your policy, and rates will increase/decrease accordingly.
Note: If your driving habits fall below Root’s safe driver minimum standards at any time, you can be dropped from the insurance program.
Visit Root
BEST FOR LOW-MILEAGE DRIVERS
State Farm – Drive Safe & Save
Best For Low-mileage Drivers
The Drive Safe & Save program by State Farm may be best suited to those who don’t drive a lot. This is thanks to the odometer read requirement and separate low-mileage discount.
Mileage driven is also critical to the Drive Safe and Save discount. So the less you drive, the better your chances of scoring the maximum discount, which can be 30% or more.
Pros:
Mileage-based discounts
Beacon doesn’t record your location
Cons:
Can increase your current rate
Requires a separate Bluetooth device
Quick Facts
Evaluation period Policy period
Discount 10% – 30%*
Minimum device requirements Android 8.0, iOS 15.0
App store reviews 4.1 Google , 4.6 Apple
* After a trial period discounts can decrease below 10%. 30% is the maximum discount in NY, but can be higher in other states.
Drive Safe and Save is also available through select connected cars, such as 2020 or newer Ford vehicles. The program was previously offered through Onstar, but enrollment has since been discontinued.
What Information Does Drive Safe & Save Gather?
Mileage
Acceleration
Hard braking
Sharp turns
Speed (exceeding the speed limit by 8+ mph)
The app will also track your phone usage to determine distracted driving.
Your driving habits will be tracked for the life of your policy, and your discount will increase/decrease according to the changes in your habits.
Note: If you already have the low-mileage discount and the program records annual mileage over 7,500, you may lose your low-mileage discount.
Visit Drive Safe & Save
BEST FOR GETTING THE BIGGEST DISCOUNT
Bonus Option: Credit Karma – Karma Drive
Best For Getting The Biggest Discount
If you are unsure which usage-based discount program is best for you, then Karma Drive might be able to help. This tool, offered by Credit Karma , tracks your driving behaviors and uses the data to shop discounts at all their partner providers.
There is no risk with using the tool (your current insurance will not go up), and you can quickly see which insurance company will give you the biggest discount.
Pros:
Shop discounts at multiple companies
Can’t raise your current rates
Cons:
No discount guarantee
Records location data
Quick Facts
Evaluation period Varies
Discount Varies
Minimum device requirements Android 8.0, iOS 14.0
App store reviews 4.7 Google , 4.8 Apple
Using Karma Drive also gives you access to all of Credit Karma’s other services, such as credit monitoring, credit product matching, and educational resources.
What Information Does Karma Drive Gather?
Mileage driven
Times of day
Average speed
Typical routes
Acceleration
Braking
This information forms your safe driving score, which is shopped around to UBI programs. You’ll see a preview of your potential discount with each partner and can request a customized quote.
The evaluation period varies from driver to driver, and there is no need to keep using Karma Drive once you receive your personalized offers.
Visit Karma Drive
Comparing Usage-Based Car Insurance Companies
It’s not easy to select the best usage-based car insurance plan for your needs. To help with this, we compare factors such as maximum discount and program availability to highlight the differences between programs.
Maximum Discount Monitoring Period Program availability All household drivers required to enroll? Can your current rate increase?
RightTrack – Liberty Mutual 30%
90 days
41 states
Yes*
Yes
SmartRide – Nationwide 40%
permanent
45 states
Yes*
No
Snapshot – Progressive unknown
permanent
49 states
Yes*
Yes
Root Car Insurance Custom rates
permanent
34 states
No
N/A
Drive Safe & Save – State Farm 30% +
permanent
47 states
No
No
Karma Drive – Credit Karma Varies
Trial period
39 states
No
No
*varies based on state
Methodology
Usage-based car insurance policies have been around for several years now, and more and more companies have started offering this type of policy or discount program. We focused on the criteria below when evaluating and comparing the available options.
Availability
For our list, we focused on companies that can offer usage-based insurance to the majority of the US.
It’s worth noting that states not served are often the result of state laws. For instance, almost no usage-based policies exist in California, as state laws limit the driving data that insurance companies can access.
Discount Amount
The goal of usage-based car insurance is to discount those who might not otherwise qualify for discounted rates. This is why discount amount, both minimum and maximum, was used in selecting which companies made our list and as a resource for comparing them.
Program Features
Each of these policies/programs offers unique features. When we encountered programs that were too similar, we chose to present the best of the two.
We also wanted to highlight the key features that could affect your insurance rates. This includes how often you are monitored, whether or not all drivers in your household need to be enrolled, and if participation can raise your rates.
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