Usage-based insurance (UBI) - Progressive's Snapshot, State Farm's Drive Safe & Save, Allstate's Drivewise, and similar programs - sets part of your premium based on how you actually drive, measured by a phone app or a small plug-in device. Used well, it is one of the few legitimate ways to cut a premium by 10-40%. Used carelessly, it can raise your rate. Here is how it works.
What these programs measure
- Harsh braking and acceleration - the single most weighted factor in most programs
- Phone handling - screen interaction while the car is moving
- Speeding - usually measured relative to posted limits
- Time of day - late-night driving counts against you
- Mileage - low annual miles earn discounts in most programs
The two program types
| Type | How it works | Risk |
|---|---|---|
| Discount-only | Monitoring can only lower your rate (e.g., Drivewise-style programs) | Low - worst case is no discount |
| Rate-adjustment | Trial period sets a score that can raise or lower your premium at renewal (e.g., Snapshot-style) | Real - poor scores can increase your rate at renewal in most states |
Ask one question before enrolling: "Can this program increase my premium?" The answer varies by state and insurer, and it is the entire risk calculus.
What data is collected
Expect trip times, distances, and locations; acceleration events; and phone-motion data. Programs generally do not access your texts or calls, but phone-based apps do read motion and (for some features) location continuously while driving. Read the program's privacy terms - some insurers have shared driving scores with data brokers for marketing, a practice several states have moved to restrict.
Who should enroll - and who shouldn't
Good fit
- Low-mileage drivers (under ~8,000 miles/year)
- Calm drivers with no late-night commuting
- Anyone whose current rate is high relative to their actual driving
Poor fit
- Night-shift workers who drive home after midnight
- Drivers in stop-and-go traffic all day (constant harsh-braking events)
- Anyone who cannot leave the phone alone in the car
Scoring well in the trial period
- Coast to stops: lift off the accelerator early instead of braking late
- Put the phone in a mount or glovebox - do not touch it at red lights
- Keep speeds within 5-9 mph of the limit; programs flag more than they ticket
- Complete the full trial period; partial data scores poorly
UBI and teen drivers
For families, telematics cuts both ways. A teen enrolled in a monitoring program can earn a meaningful discount - and the weekly scorecard is a coaching tool. But a teen's harsh-braking events can also raise the family premium if the program scores the whole policy. Run the numbers both ways with our guide to lowering car insurance for a teen driver.