If you’re a good driver who likes the idea of getting car insurance discounts based on safe driving habits and low mileage, you might consider usage-based insurance programs or carriers. They use “telematic” technology — tracking your driving behavior with a mobile app or device that plugs into your car’s diagnostic port — to offer discounts and rewards, or to create a customized insurance rate.
But these programs can vary in how they work. While a telematic rewards program could give you a discount on your regular rate, a usage-based policy will create a rate formed around how well you drive.
Two of the earliest versions, Drivewise from Allstate and Snapshot from Progressive, differ in this way, so you’ll want to compare programs to determine which, if any, is the best fit for you:
Drivewise vs. Snapshot
|Drivewise by AllState||Snapshot from Progressive|
|What it is:|
|A free program that rewards you for good driving.||Usage-based car insurance that customizes your rate based on your driving habits. Your rate could increase if you are deemed an unsafe driver.|
|Current Allstate customers and non-customers who are safe drivers and want to earn rewards in exchange for sharing driving data.||Consistently safe drivers willing to have driving monitored to determine their insurance rate.|
|Savings and discounts include:|
|Driving is monitored by:|
|Installing the Allstate app on your phone.||Installing the Snapshot app on your phone or plugging a device into your car.|
|How to save:|
» MORE: How to save on car insurance
How Drivewise from Allstate works
Drivewise works like a rewards program – the safer you drive, the more free stuff you earn. The program is free and available to everyone, even those with a different insurer, but Allstate customers who enroll may receive additional discounts off their policies for good driving habits. Plus, enrolling in the program comes with no risk of an increased premium.
Once you install the Allstate mobile app, Drivewise will begin to automatically monitor your driving. The app runs in the background of your phone as long as:
- Geo-location services are enabled.
- The phone is charged to at least 25%.
- Your movement exceeds 20 mph.
The app then provides insights into your past trips and habits, such as how fast you drive or how hard you hit the brakes. The app can even help you remember where you parked your car, or let you call for roadside assistance. And while phone activity is not used to determine your savings or rewards, the app can alert you to unsafe phone usage while driving.
It’s important to note that unlike the device, the app is not linked to any specific vehicle, so if you are a passenger while someone else is driving, the app will still log the trip. But any trips can be easily deleted from the app and won’t count towards your overall trip record.
Drivewise rewards safe driving with:
- Cash back. If you’re a current Allstate customer, you can earn up to 10% of your premium back after you sign up. You can also earn up to 25% back every six months if you maintain safe driving habits.
- Allstate Rewards points. These points can be redeemed for gift cards, sweepstakes, travel deals and more through Allstate’s free rewards program. New users get 10,000 points for signing up. Safe driving challenges are also offered, such as going three days without any sudden braking, and successful completion of a challenge can result in more points.
To be considered a “safe driver,” you must:
- Keep driving speeds under 80 mph.
- Avoid late-night driving.
- Avoid hard braking.
If you’re interested, make sure to check with Allstate to see if Drivewise is available in your state, as it’s not available everywhere. Savings may also vary by state, including New York in which Allstate rewards are unavailable.
Other telematics reward and discount programs
|Company||Discounts offered||How to save|
|Drive Safe & Save by State Farm||Up to 30%.||
|Nationwide SmartRide||10% upon initial sign up and up to 40% based on driving habits.||
|Safeco RightTrack||Between 5% and 30%.||
|Geico DriveEasy||Up to 20% for signing up — no discount or rewards for safe driving.||
|DriveSense by Esurance||Varies.||Log at least 50 driving trips in a policy period.|
How Snapshot from Progressive works
Snapshot is usage-based insurance — meaning what you pay is determined by how many miles you drive as well as your driving habits. Progressive offers a 30-day trial of Snapshot, after which you can see an insurance quote based on your driving habits.
When a Progressive customer enrolls in Snapshot, an initial discount (typically around $26) is applied for one policy period. After that, the new insurance rate is based on the driving data that was tracked through either the Snapshot app or plug-in device.
Using Snapshot’s usage-based pricing means your rate could go up if your driving is considered risky — the company says around 2 out of 10 drivers get an increased rate. However, Progressive says drivers who do receive discounts receive an average of $145 in savings per year.
Snapshot tracks driving in two different ways:
- Mobile app. The Snapshot app uses your phone’s GPS to determine how fast and far you drive, as well as how hard you brake. It also keeps track of how often you use your phone while driving. If there are multiple drivers on your policy, each driver will need to install the app on their phone and keep it on during the first policy period.
- Plug-in device. You can have the Snapshot plug-in device sent to you and plugged into your car’s diagnostic port to track your driving habits. If you do any hard braking, the device will beep.
Snapshot requires regular data collection from your mobile app or plug-in device to mitigate attempts to cheat the program. If the app is deleted or paused for an extended period of time, you’ll be asked to reinstall the app or switch to a plug-in device. If Progressive determines that not enough data is being collected from the plug-in device, you may be removed from the Snapshot program and see a rate increase.
Discounts are earned by:
- Avoiding hard braking and acceleration.
- Limiting late-night driving between 12 a.m. and 4 am.
- Driving fewer miles.
- Not using your phone while driving (mobile app only).
Snapshot availability and program details vary by state, and the sign-up discount is not available in Alaska, California, Hawaii, North Carolina or New York. In some states, you only have the option to sign up for Snapshot when you’re first purchasing a Progressive policy. While you do have the option to opt out of the program once you’ve started, you’ll lose any associated discounts and your rate may go up.
Other usage-based car insurance companies and programs
|Company||Estimated Savings*||How it works|
|Root Insurance||Up to 52% over your previous company.||Your driving is tracked for about 3 weeks by installing the Root app on your phone.
After the test-drive period, you get a quote.
|Metromile||$741 a year, on average.||You pay a base rate each month, plus a per-mile rate.|
|IntelliDrive by Travelers||Up to 20%.||The mobile app tracks driving for 90 days. A discount is not guaranteed, and drivers could see an increase in their rates.|
|Milewise from Allstate||Up to 25%.||A plug-in device in your car and a mobile app track your driving. Your rate includes both a daily base rate and per-mile rate.|
|*Pricing is according to the insurer's websites.|
» MORE: Compare car insurance rates
Before you jump in
Before you sign up for a usage-based insurance program, read the terms and conditions carefully. Keep in mind that you might not score the maximum discount advertised, no matter how hard you try to drive safely.
And be mindful of how your privacy information is tracked and used. For example, Snapshot and many others track your location. While the information is not used to create your rate, it may be used for underwriting your policy.