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Professor of Risk Management
25+ years in insurance
Former commercial lines underwriter
Updated
Usage-based insurance (UBI) is a type of auto insurance that adjusts your premium based on how much and how safely you drive. Also called telematics, pay-as-you-drive, or pay-per-mile insurance, these programs track behaviors such as mileage, speed, braking, and phone use through a smartphone app or plug-in device.[1]
Popular UBI options include Progressive Snapshot and State Farm Drive Safe & Save. Low-mileage drivers can save up to 50% compared to traditional auto insurance. Here’s how UBI works, potential savings from our top picks, and how to tell if telematics is right for you.
UBI programs track driving behaviors like speed, braking, acceleration, mileage, time of day, and phone use.
Most UBI programs offer a discount between 10% and 30%, but some may raise rates for risky drivers.
Safe drivers who drive fewer miles save the most with usage-based insurance.
Usage-based insurance uses data tracking technology to customize your insurance premium based on your actual driving performance. By monitoring how often, how far, and how safely you drive, insurers can offer cheaper rates to safe drivers.
The idea is simple: Drive less and drive better, and you could save money. But it won’t always lead to a discount, as risky behavior can lead to a rate increase with some UBI programs.
Here’s a closer look at how it all works.
UBI programs focus on specific driving behaviors to assess your risk. Common rating factors include:
Mileage: How many miles you drive in a day, week, or month
Speed: How fast you typically drive and whether you often exceed speed limits
Braking and acceleration: Frequent hard braking or rapid acceleration can be red flags
Time of day: Driving late at night or during rush hour can increase your accident risk
Phone use: Some mobile apps track distracted driving caused by phone use
Insurers use different tracking technologies for data collection depending on the year, make, and model of your vehicle.
Mobile app: Uses your phone’s GPS and accelerometer to track speed, braking, acceleration, and phone use.
On-board diagnostic device: These GPS devices plug into your car’s OBD-II port and monitor driving behavior, mileage, and location.
Connected car: Sends data directly from your vehicle without needing extra hardware or apps.
Safe, low-risk drivers typically get high driving scores, resulting in discounts on their auto insurance policies. Driving carefully, avoiding late-night trips, and staying off your phone while behind the wheel are all safe behaviors. If the data shows risky habits, your savings could go down, or in some cases, your rate could go up.
The average comparison shopper saves up to $867.†
More companies are offering usage-based insurance programs, but every company’s program details and offerings vary by state.
For example, the Farmers Signal program isn’t available in Florida, Hawaii, New York, and South Carolina. And though the program is available in California, residents don’t receive a discount.
In the table below, you’ll find car insurance companies that offer UBI programs, along with the discounts you can receive when you sign up.
Program  | UBI Type | Initial Discount | Maximum Discount |
|---|---|---|---|
| Allstate Drivewise | Telematics | Undisclosed | Up to 40% |
| Allstate Milewise | Pay-per-mile | N/A | Save around 50% for 3,000 annual mileage |
| American Family KnowYourDrive | Telematics | 10% | Up to 20% |
| Chubb SafeLane | Telematics | 10% | Up to 20% |
| Farmers Signal | Telematics | 5% | Up to 15% |
| GEICO DriveEasy | Telematics | 10% | Up to 10% |
| Liberty Mutual RightTrack | Telematics | 10% | Up to 30% |
| Nationwide SmartMiles | Pay-per-mile | N/A | An average of 25% + an additional 10% for safe drivers |
| Nationwide SmartRide | Telematics | 10% | Up to 40% |
| Progressive Snapshot | Telematics | $169 average | $322 average |
| Safeco RightTrack | Telematics | 10% | Up to 30% |
| State Farm Drive Safe & Save | Telematics | 10% | Up to 30% |
| The Hartford TrueLane | Telematics | Up to 15% | Up to 40% |
| Travelers IntelliDrive | Telematics | 10% for new customers only | Up to 30% (40% in NV) |
| USAA SafePilot | Telematics | Up to 10% | Up to 30% |
Allstate Milewise offers the highest savings potential, with up to 50% off for drivers who only log 3,000 miles per year.
Among traditional telematics programs, Allstate Drivewise, Nationwide SmartRide, and The Hartford TrueLane advertise the largest maximum discounts of up to 40%.
Most UBI programs use telematics, while Allstate Milewise and Nationwide SmartMiles are true pay-per-mile insurance options, which are ideal for low-mileage drivers.
Keep in mind that some programs, such as GEICO DriveEasy, Progressive Snapshot, and Travelers IntelliDrive, may increase rates for risky driving. Others — like Liberty Mutual RightTrack, State Farm Drive Safe & Save, and USAA SafePilot — only apply discounts.
No single UBI program works best for every driver. Some reward low-mileage drivers, while others focus on safe driving habits. Differences in pricing models, tracking methods, and whether rates can increase vary by insurer, so comparing companies is essential.
Below are five standout programs worth considering, depending on your driving style and preferences.
| User Reviews | 3.5 |
|---|---|
| Our Rating Compare.com's ratings are determined by our editorial team. The objective formula used in these reviews weighs several important factors to consider when choosing financial products and services, including customer satisfaction ratings, ease of use, and a number of other components. | 4.5 /5 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $76/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $144/mo |
Allstate's score | Industry average | |
|---|---|---|
| Coverage options | 4.1 | 3.2 |
| Customer service | 4.0 | 3.6 |
| Discounts | 4.3 | 2.9 |
| Policy transparency | 4.1 | 3.1 |
| Value | 3.8 | 2.9 |
Customers appreciate the insurer's efficient service and knowledgeable agents but find the consistently rising rates and lack of communication to be major drawbacks.
Allstate offers two UBI options: Drivewise, a telematics program that provides savings of up to 40%, and Milewise, a pay-per-mile plan ideal for infrequent drivers. Milewise charges a daily base rate plus a per-mile fee, and users driving around 3,000 miles per year may save up to 50%.
Drivewise uses a mobile app and doesn’t penalize bad driving with rate hikes, which makes it a safer option if you’re unsure about your driving habits.
| User Reviews | 3.9 |
|---|---|
| Our Rating Compare.com's ratings are determined by our editorial team. The objective formula used in these reviews weighs several important factors to consider when choosing financial products and services, including customer satisfaction ratings, ease of use, and a number of other components. | 4.6 /5 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $87/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $143/mo |
GEICO's score | Industry average | |
|---|---|---|
| Coverage options | 4.3 | 3.2 |
| Customer service | 4.3 | 3.6 |
| Discounts | 4.4 | 2.9 |
| Policy transparency | 4.4 | 3.1 |
| Value | 4.3 | 2.9 |
Drivers appreciate the easy communication and good customer service, but many are unhappy with the regular and significant price increases.
GEICO DriveEasy tracks your driving through a smartphone app. The maximum discount is the lowest available — up to 10% — but the program is easy to join and available in most states. The mobile app provides tips to help you improve your insurance score to potentially get more savings.
But risky driving behavior can result in higher premiums, so it’s best for drivers who are confident in their skills and want to improve their driving habits over time.
| User Reviews | 3.2 |
|---|---|
| Our Rating Compare.com's ratings are determined by our editorial team. The objective formula used in these reviews weighs several important factors to consider when choosing financial products and services, including customer satisfaction ratings, ease of use, and a number of other components. | 4.5 /5 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $97/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $183/mo |
Nationwide's score | Industry average | |
|---|---|---|
| Coverage options | 3.0 | 3.2 |
| Customer service | 3.0 | 3.6 |
| Discounts | 3.0 | 2.9 |
| Policy transparency | 3.0 | 3.1 |
| Value | 3.4 | 2.9 |
Nationwide SmartRide offers up to 40% in savings, plus a 10% discount just for enrolling. It uses a mobile app or a plug-in device to track your driving behavior for four to six months, then provides a final discount that applies to your policy at the next renewal.
SmartMiles, its pay-per-mile option, requires either a plug-in device or connected car tech to track mileage, up to 250 miles per day. While your base premium remains the same each month, your mileage premium varies by your actual mileage each month.
| J.D. Power J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale. | 622 |
|---|---|
| Our Rating Compare.com's ratings are determined by our editorial team. The objective formula used in these reviews weighs several important factors to consider when choosing financial products and services, including customer satisfaction ratings, ease of use, and a number of other components. | 4.3 /5 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $93/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $155/mo |
Customers appreciate the initial affordability and claim handling but dislike the frequent and unexplained rate increases, as well as the poor customer service.
Progressive Snapshot works with either a mobile app or a plug-in GPS device. The company advertises an average annual savings of $322 with its telematics program, but around 20% of drivers see their rates increase due to risky driving habits. You may save by avoiding driving late at night, limiting hard accelerations and braking, driving fewer miles, and staying off your phone.
| User Reviews | 3.9 |
|---|---|
| Our Rating Compare.com's ratings are determined by our editorial team. The objective formula used in these reviews weighs several important factors to consider when choosing financial products and services, including customer satisfaction ratings, ease of use, and a number of other components. | 4.7 /5 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $56/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $107/mo |
State Farm's score | Industry average | |
|---|---|---|
| Coverage options | 4.4 | 3.2 |
| Customer service | 4.4 | 3.6 |
| Discounts | 4.3 | 2.9 |
| Policy transparency | 4.3 | 3.1 |
| Value | 4.1 | 2.9 |
Customers appreciate the helpful agents and prompt claim handling, but many are unhappy with the constant rate increases, even for safe drivers. Some also reported poor customer service.
State Farm Drive Safe & Save uses a mobile app and Bluetooth to track real-time driving data. You can turn on Accident Assistance, which can offer help if it detects an accident. Based on driving performance and mileage, safe drivers can save up to 30%.
Your discount may change at each policy renewal, as the discount is based on the previous 12 months of data. Drivers with a low-mileage discount may see their discount removed for driving over 7,500 miles in a year.
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Choosing between usage-based and traditional insurance comes down to your driving style, how often and how far you drive, and your comfort with data tracking. Here’s how the two models differ and the type of driver each one suits best:[2]
Usage-based insurance:
Calculates your rates based on real-time driving habits, like braking, speed, mileage, phone use, and time of day
May raise privacy concerns due to data tracking and GPS monitoring
Ideal for safe, low-mileage drivers who want cheaper rates and don’t mind being tracked while driving
Traditional insurance:
Sets your rates using standard factors like age, ZIP code, vehicle type, and driving history
Offers more predictable rates but may have fewer rewards for safe driving
Better for drivers who rack up more miles or prefer not to share driving data
Savings from usage-based insurance can vary widely, but many drivers save 10% to 30%, depending on their driving habits.
For example, drivers save an average of $322 per year with Progressive’s Snapshot. Low-mileage drivers who average 3,000 miles annually with Allstate Milewise save around 50% compared to traditional car insurance policies. The Hartford TrueLane offers up to 40% savings with safe driving habits.
Keep in mind that insurers don’t guarantee savings, and risky driving behaviors can lead to higher rates with some UBI programs.
We bring top insurance companies to you so that you can easily find the best deal.
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A UBI program might be right for you if you:
Drive infrequently or mainly during the day
Are a cautious driver who generally avoids hard braking, fast accelerations, and speeding
Are comfortable sharing your location and driving data
Drive fewer miles than the average per year
Have a good driving record
UBI tends to benefit safe, low-mileage drivers who mainly drive during daylight and are OK with their insurer tracking their driving habits. On the other hand, high-mileage, late-night, or aggressive drivers may not see savings or could even face rate increases.
If you’re wondering if usage-based insurance is right for you, check out the answers to common questions to help you decide.
Yes. Some usage-based insurance programs may raise your premium if your driving behavior shows more risk, like speeding and hard braking. But most only offer UBI as a discount for safe driving.
It depends on the company and program. Many UBI programs use mobile apps, but some insurers offer plug-in devices or built-in connected car tracking technology.
Not exactly. Pay-per-mile insurers charge you based primarily on how far you drive for each trip, while usage-based insurance considers both mileage and how safely you drive.
It can be, especially for safe, low-mileage drivers. But savings aren’t a guarantee and depend heavily on driving habits, the time of day, and the number of miles you drive.
Insurance companies typically monitor speed, hard braking, fast acceleration, cornering, phone use, and driving times, especially late at night and during rush hour. Each insurer determines how much weight each factor has on insurance scores.
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Professor of Risk Management
25+ years in insurance
Former commercial lines underwriter
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