Auto Insurance Prices Are Still Skyrocketing in 2024. Here's How to Fight Back

Do you feel as if car insurance prices just keep going up? According to the latest inflation data from the Bureau of Labor Statistics, the average price of auto insurance increased 20.3% from December 2022 to December 2023. Bloomberg analysis finds that average car insurance rates are up 37% since January 2020.

There are many reasons why car insurance is getting more expensive. One big reason is that cars are made with more complex, expensive digital technology. There's no such thing as a "minor fender bender" anymore. Instead, car crashes often result in damage to digital sensors, backup cameras, blind-spot detection, and specialized parts. And that takes more money to fix, and more money to insure.

Do you ever feel helpless about car insurance costs, like you just have to sit there and keep paying higher rates? The truth is: there are many aspects of car insurance that are beyond your control. You can't control the cost of auto parts or global supply chains. You can't control how other people drive. But you can control your driving habits. And now there's a new way to fight back against the escalating cost of car insurance -- it's called telematics.

Let's look at how you can use telematics car insurance to cut your insurance costs in 2024.

Telematics car insurance: Take control of your premium

Telematics car insurance is a type of data-driven insurance that lets you take control over the cost of your insurance premium. If you sign up for a telematics insurance plan, you agree to share some driving data with your insurance company. This might involve downloading a mobile app, or attaching a small device to the inside of your vehicle.

The insurance company then uses the telematics device or your mobile app to measure some real-life data from your everyday driving. Companies might analyze:

• How fast you accelerate or how hard you hit the brakes
• How many miles you drive or how much time you spend idling in traffic
• What time of day (or night) you're on the road
• Signs of distracted driving, like cellphone use

Telematics car insurance is not the same as pay-per-mile car insurance. Instead of just checking your odometer, telematics lets you demonstrate to your insurance company that you are a safe, responsible driver. Telematics helps you get personalized car insurance that might be lower than the going rate in your city, or for people your age. It can also help you improve your driving with built-in safety tips and driving challenges -- think of telematics as another safety feature you can add to your vehicle to reduce your risk of car crashes.

Which car insurance companies offer telematics

Several car insurance companies offer telematics to reward safe driving. Different companies have different brand names for these plans, with unique features and benefits. Here are a few of the most prominent companies with telematics car insurance, and a few highlights of each plan.

State Farm Drive Safe & Save™

If you sign up for State Farm's telematics insurance, you get an immediate 10% discount for enrolling, and the possibility of additional discounts of up to 30% based on your driving. State Farm will not raise your premium as a result of your driving data; your discount might be $0 but your premium won't go up.

Nationwide SmartRide®

Nationwide also offers an immediate 10% discount just for signing up for its SmartRide® telematics program. You can also earn additional discounts of up to 40% based on your safe driving behavior. Nationwide SmartRide® promises to not raise your premium, and most drivers can qualify for discounts quickly -- with only 80 days of driving data.

Progressive Snapshot®

New Progressive customers get an immediate participation discount (average savings of $94) just for signing up for the Progressive Snapshot® program. Customers who earn a Snapshot® discount have average annual savings of $231. Unfortunately, not everyone will get a discount; about 2 out of 10 Snapshot drivers see an increase in premium.

Allstate Drivewise®

Allstate has a telematics program called Drivewise® that rewards customers for safe driving. The company doesn't promise any estimated average savings, but you do get an immediate discount for signing up. The Allstate app only measures a few types of data -- you can get rewarded for keeping your speed below 80 mph, making safe, gradual stops, and limiting your late-night driving. Risky driving can lead to a higher premium.

Keep in mind that regardless of the car insurance company, no specific safe driving discounts are guaranteed. Telematics car insurance is not available in all states, and your exact discount (if any) could be different depending on your state.

Bottom line: If you're tired of feeling powerless to stop the ever-accelerating price of car insurance, it's time to take the wheel and regain control. Telematics car insurance can reward you for safe driving -- not just "accident forgiveness," but based on your everyday driving data. Prove to your car insurance company that you're a lower risk, and it may be more likely to pay you back with discounts.