Telematics
Programs that price your insurance partly on how you actually drive, tracked by an app or device.
Telematics programs, sometimes called usage-based insurance, measure driving behavior and feed it into underwriting and pricing. The data comes from a phone app, a small device plugged into the car's diagnostic port, or the connected-car system built into newer vehicles by the manufacturer.
What gets measured varies by insurer, but the common inputs are hard braking, rapid acceleration, speed against the posted limit, sharp cornering, time of day, total miles, and — on phone-based programs — handling the phone while the car is moving. Some programs score every trip; others watch a set window, often around 90 days, then set a factor at renewal.
Programs are usually built one of two ways. Some give a discount for enrolling and adjust it at the first renewal based on the score. Others price continuously, or charge by the mile on top of a small base premium. Whether a score can increase the price rather than only shrink a discount depends on the insurer and on state rules, and some states restrict it.
Data quirks come up often. A trip taken as a passenger or in a rideshare can be recorded as driving unless it is flagged in the app. Braking hard because of someone else's mistake still registers as a hard brake. Many programs let a driver review recent trips and flag them.
Privacy terms are part of the deal. The enrollment agreement describes what is collected, how long it is kept, and whether location data is stored or shared. Programs are generally voluntary, and a driver can usually leave one — though the enrollment discount leaves with it.
In real life
A driver enrolls in a phone-based program and gets a 10% discount at signup. Over the 90-day watch window the app logs 1,900 miles, eleven hard braking events, and four trips after midnight. At renewal the insurer turns that record into a rating factor and replaces the flat signup discount with a score-based one. Depending on the program and the state, the new number can land above or below the original 10%.
Common questions
Does telematics raise your car insurance?
It can, depending on the program and the state. Some programs only lower the price, so a weak score simply means a smaller discount. Others let the score push the price up at renewal. A few states limit which behaviors can be used in rating at all, so the rules depend on where the policy is written.
What does a telematics app track?
Common inputs are hard braking, fast acceleration, cornering, speed against the posted limit, miles driven, time of day, and phone handling while the car is moving. Many programs also record trip location. The enrollment agreement lists exactly what a specific program collects, how long it is kept, and who it can be shared with.
Can you turn off a telematics program?
Programs are generally voluntary, and most insurers let a driver withdraw. Any discount tied to participation typically ends at that point, and some programs still apply the score already collected at the next renewal. Deleting the app without withdrawing is often read as non-participation, which some programs treat the same as leaving.
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Definitions describe how these terms are generally used across the U.S. market. Wording, limits and exclusions vary by insurer, policy form and state — the policy you hold is what controls. See the full Insurance Glossary.