How State Farm Uses Telematics to Help You Save Money on Car Insurance

Car insurance prices have been skyrocketing in the past few years, and some drivers are looking for new ways to get discounts on car insurance. Now there is a new way of handling car insurance, with the power of mobile apps: "telematics." 

Some of the best car insurance companies are now offering telematics car insurance programs. With these special insurance plans, you sign up and agree to track (and share) some of your everyday driving data with your car insurance company. By using a mobile app or other easy-to-install telematics devices, insurance companies can see your safe driving habits, and reward you with car insurance discounts. 

Let's look at how State Farm, one of The Ascent's top picks for best cheap car insurance companies, uses telematics to offer special discounts to safe drivers who share their data. 

State Farm's telematics car insurance: Drive Safe & Save™

The Drive Safe & Save™ program is a special telematics car insurance option from State Farm. When you choose to enroll in Drive Safe & Save, State Farm will send you a Bluetooth beacon device that attaches to your windshield. This Bluetooth device then pairs with the Drive Safe & Save app to track and record your driving data from your everyday trips behind the wheel. 

The State Farm telematics device tracks the following information about your driving: 

• Speeding: Higher rates of speed often lead to higher rates for auto insurance. 
• Rapid acceleration: If you've got a lead foot, you might be a riskier-than-usual driver. 
• Hard braking: Not leaving yourself enough following distance and room to slow down can be a sign you're at risk of a crash.  
• Fast cornering: Busy turns are often the site of car crashes; take those corners slow.
• Distracted driving: The State Farm Drive Safe & Save app can tell when your phone is in use while your car is in motion. Distracted driving is a leading cause of accidents. This State Farm telematics car insurance plan can help you stay safe and avoid the temptation to scroll social media while at the wheel. 

You can get feedback about your driving from the State Farm Drive Safe & Save mobile app. The app also records your trips and shows you how much money you can expect to save on car insurance based on your driving data. Your discount gets calculated at every policy renewal (about every six months) using telematics driving data from the previous 12 months.  

Although there is no guarantee for how much you can save with Drive Safe & Save, State Farm promises an immediate 10% discount just for enrolling in the program, and offers possible premium reductions of up to 30%. Exact discounts will depend on your state. 

State Farm telematics car insurance: Pros and cons 

Let's look at a few unique advantages and possible downsides for State Farm Drive Safe & Save. 

State Farm Drive Safe & Save pros 

• Your premium won't go up: Some other car insurance companies' telematics programs can increase your premium if your driving habits show you're a higher risk than expected. State Farm's Drive Safe & Save does not do this. Your discount might only be $0, but your premium will not increase as a result of signing up for this telematics program. The only way that you might have to pay more for car insurance after using this program is if you are receiving a low mileage discount from State Farm, and the telematics devices show you're driving more miles than the limit. 
• Instant 10% savings: When you enroll in State Farm Drive Safe & Save, you'll get an immediate premium reduction of 10%. You can then use your safe driving habits to earn even more discounts (up to 30%). 
• Highly rated mobile app for iOS: The State Farm Drive Safe & Save app is rated 4.6 out of 5 stars on the App Store. 

State Farm Drive Safe & Save cons 

• No guarantee of big discounts: Discounts might be different for drivers in different states, and your discount might vary from term to term based on changes in your driving habits. Even if you're a careful, diligent driver, you still might not qualify for the highest 30% discount on your car insurance premium. 
• Discounts don't happen overnight: Any discounts you earn from your safe driving won't show up on your car insurance premium until the next policy renewal -- which could be up to six months. So don't make immediate plans for what to do with all the extra cash in your budget. 
• Android app is not well-reviewed: Although the Drive Safe & Save app got high ratings for iOS, the Android version only got 4 out of 5 stars on Google Play. Android customers have complained that the app is intrusive, sometimes penalizes them even if they're not using their phone while driving, and drains their phone batteries. 
• Not available in all states: The State Farm Drive Safe & Save program is not available in California, Massachusetts, and Rhode Island. Discounts might not be available in North Carolina depending on the customer's individual situation. Talk to your local State Farm insurance agent for more information on how to sign up for telematics with State Farm. 

Bottom line: Want to save money on car insurance just by using a mobile app and sharing some data? The State Farm Drive Safe & Save program can give you an easy way to get rewarded for safer driving, without having to cut back on your coverage or raise your deductible. Telematics programs can help you get car insurance discounts without any financial risk.