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Telematics: should you let your insurer ride along?

Usage-based insurance can reward smooth drivers. Here is what gets tracked and the trade-offs.

Telematics or usage-based insurance (UBI) programs measure how you drive using a smartphone app, a plug-in device or a connected-car system. Many insurers give a discount just for enrolling and adjust it based on what they see.

What is usually measured

  • Hard braking and rapid acceleration.
  • Speed, sometimes compared with posted limits.
  • Time of day — late-night driving is often rated as riskier.
  • Mileage.
  • Phone use while driving, in app-based programs.

Who tends to benefit

Low-mileage drivers, daytime commuters and people with smooth driving habits. Pay-per-mile programs can suit drivers who rarely use the car.

The fine print

Some programs can raise your rate if the data shows risky driving, and others only apply discounts. Read whether your program can increase your premium before you enroll.

Also check what data is collected, how long it is kept and whether location is tracked. You can typically leave a program, though any enrollment discount may end.

This guide is general information from Turbo Auto Quote, not insurance, legal or financial advice. Coverage rules vary by state and insurer.