Usage-based car insurance programs have emerged as a popular option for safe drivers seeking to lower their premiums through telematics technology. According to a new analysis by Yahoo Finance, Farm Bureau’s Driveology program tops the rankings for best usage-based insurance, offering drivers an automatic 10% enrollment discount and the potential to save up to 50% for safe driving habits without the risk of rate increases for poor performance.
The analysis evaluated 20 major insurers based on six key factors including enrollment discounts, maximum savings potential, rate impact policies, and overall competitiveness. Following Farm Bureau in the rankings are USAA’s SafePilot program, Travelers’ IntelliDrive, Nationwide’s SmartRide, and State Farm’s Drive Safe & Save program.
How Usage-Based Car Insurance Works
Usage-based car insurance utilizes telematics technology to monitor driving behavior through smartphone apps or plug-in devices connected to a vehicle’s onboard diagnostics port. These programs track various factors including mileage, braking patterns, acceleration, speed, time of day driven, and phone usage while driving. After a monitoring period, insurers calculate a driving score that determines potential discounts or, in some cases, rate increases.
Most programs offer an immediate enrollment discount ranging from 5% to 15%, according to the report. Drivers can then earn maximum discounts between 25% and 50% based on their performance during the monitoring period. However, not all telematics programs operate the same way regarding rate impacts.
Key Differences Among Top Usage-Based Insurance Providers
A critical distinction among programs involves whether insurers can increase rates for risky driving behavior. Farm Bureau, USAA, Nationwide, and State Farm do not raise premiums based on poor driving performance, offering only discounts for safe habits. In contrast, Travelers’ IntelliDrive can increase rates for risky driving in most states, though exceptions exist in Washington D.C., Montana, North Carolina, and Virginia.
Additionally, the programs differ significantly in their discount structures. Farm Bureau offers the highest maximum discount at 50%, while USAA and Travelers cap their renewal discounts at 30%. Nationwide provides up to 40% off for safe driving and also offers SmartMiles, a separate pay-per-mile program designed specifically for low-mileage drivers.
Pricing and Availability Considerations
Base insurance rates vary considerably among the top-ranked providers. According to data from Savvy Insurance Solutions cited in the analysis, Farm Bureau averages $151 monthly for full coverage, making it the most affordable option. USAA follows at $168, though availability is limited to military members, veterans, and eligible family members.
State Farm averages $190 monthly, while Travelers comes in at $183 and Nationwide at $199 for full coverage policies. However, insurers calculate starting rates using numerous factors including age, location, vehicle type, driving history, and credit score, meaning individual quotes can differ substantially from these averages.
Who Benefits Most from Telematics Programs
Insurance experts indicate that usage-based programs work best for drivers who maintain safe habits and log fewer miles annually. Low-mileage drivers who avoid hard braking, excessive speeding, and late-night driving typically see the greatest savings. Meanwhile, drivers who frequently speed, brake hard, or drive during high-risk hours may find traditional policies more cost-effective, particularly with insurers that can increase rates based on telematics data.
The analysis also emphasizes the importance of understanding how each insurer scores driving behavior. Some companies weigh hard braking heavily, while others focus more on mileage or phone use. Privacy-conscious consumers should review how companies store and use telematics data before enrolling in these programs.
Beyond Discounts: Evaluating Complete Coverage
While telematics discounts can reduce premiums, the underlying policy quality remains essential. The analysis considered factors beyond usage-based programs, including coverage options, available discounts, claims handling grades, and digital experience scores. Farm Bureau offers eight discount types and six coverage options, earning a B+ grade for claims handling from Crash Network, though its digital experience score of 1.8 out of 5 lags behind competitors.
USAA excels in digital experience with a 4.75 score and offers 13 coverage options plus 15 discount types, though its claims handling grade of D+ raises concerns. State Farm and Travelers both scored above 4.6 for digital experience and offer 14-16 discount types, providing more comprehensive policy flexibility for drivers seeking additional coverage options.
Drivers interested in enrolling in usage-based insurance programs should compare quotes from multiple insurers and carefully review whether risky driving can increase their premiums. The monitoring period length and how driving scores reset at renewal also vary by company, making it important to understand each program’s specific terms before committing to a telematics policy.
