Most Telematics Drivers Did Not Get a Lower Premium

In Maryland, the only state with public telematics outcome data cited here, just 31% of enrolled drivers received a lower premium in 2023. Another 24% paid more, while the largest group—45%—saw no change, despite advertisements promoting discounts of “up to 30–40%.” Telematics can save money, but a discount is not the most common documented outcome. The Consumer Federation of America summarizes the Maryland data.

The Case for Telematics Is Reasonable but Incomplete

The conventional pitch is straightforward: an insurer observes how you drive, rewards careful behavior, and gives you a price reflecting your individual risk rather than relying only on broader rating factors. A low-mileage driver who travels mostly during the day, handles the phone rarely, and brakes smoothly may reasonably expect to benefit.

Savings are real for some participants. Consumer Reports surveyed 40,566 U.S. auto-policy holders in 2024 and found that surveyed telematics users reported median annual savings of $120. Policies that included younger drivers had higher median reported savings of $245. Advertised maximum discounts ranged roughly from 15% to 40%. Consumer Reports explains the survey and its limitations.

Those figures support the narrow claim that telematics can reduce premiums. They do not establish that every safe driver saves, that $120 is the average across everyone who enrolls, or that a telematics policy beats the best conventional quote available to the same customer.

The Maryland distribution is the clearest reason to resist treating enrollment as an automatic discount. Its 31% decrease, 45% no-change, and 24% increase figures describe one state and one year. They do not reveal the average dollar change in any bucket or establish nationwide probabilities. Still, they directly contradict the assumption that most participants necessarily receive lower premiums.

California’s AB 311 would end the state’s 20-year ban on telematics-based auto pricing. The Consumer Federation of America opposed the proposal in August 2026, arguing from the Maryland experience that advertised savings obscure no-change and higher-premium outcomes. The California debate does not prove that telematics is harmful, but it raises a concrete question for drivers asked to opt in: what is the full outcome distribution, not merely the maximum available discount?

Enter your premium and ordinary driving pattern, then compare it with Maryland’s documented outcomes and the advertised discount ceilings.

Maryland’s Results Do Not Support an Automatic-Discount Assumption

Telematics enrollment in Maryland grew 45% from 2021 through 2023. Even after that growth, only 13% of the state’s drivers were enrolled: 303,845 out of 2,296,713 policyholders.

Among the 2023 participants:

The data do not report how much the typical saver gained, how much the typical higher-paying participant lost, or the net dollar result across all enrollees. They also do not prove that the telematics score alone caused every change. Ordinary renewal adjustments and other permitted rating factors can affect the final bill.

That limits what the distribution can predict for an individual driver. It remains useful because it answers a simpler question that advertising usually leaves unanswered: did most participants receive any reduction? In this dataset, they did not.

The word “median” matters when comparing these results with the Consumer Reports survey. Median reported savings of $120 means half of the surveyed telematics users reporting savings around that distribution were above the midpoint and half below it. It is not a mean average for everyone offered or enrolled in telematics, and the survey was not a controlled comparison showing what identical drivers would have paid under equivalent non-telematics policies.

Progressive offers another example of careful labeling. It reports average annual savings of $328 for Snapshot participants who save. That population excludes participants who do not save. Progressive also says its telematics program may produce a personalized discount or surcharge. Progressive describes the population covered by its savings figure.

No source cited here provides a reliable nationwide average net saving across all enrollees after including lower, unchanged, and higher premiums.

The Program’s Rules Matter More Than Its Headline Discount

Telematics records information through a smartphone app, a plug-in device, or compatible connected-vehicle technology. Depending on the program, it may monitor mileage, speed, braking, acceleration, cornering, trip timing, location, routes, phone activity, and other vehicle or trip information. The National Association of Insurance Commissioners explains common collection and pricing practices.

There are two overlapping approaches. Pay-how-you-drive programs evaluate recorded behavior. Pay-as-you-drive or pay-per-mile programs place greater weight on distance, sometimes combining a fixed cost with a mileage-related charge.

Telematics usually supplements rather than replaces conventional pricing. The insurer may still consider the vehicle, location, drivers, claims and driving history, coverage limits, deductibles, and other permitted characteristics. A strong telematics score therefore may not overcome an expensive starting quote.

Three pricing structures create materially different risks:

1. Discount-only: Recorded driving may qualify for savings but is not supposed to create a telematics surcharge.
2. Provisional discount: An initial participation discount can shrink or disappear after monitoring.
3. Personalized rate: The monitored result can produce either a lower or higher price.

A disappearing enrollment discount can increase the bill relative to what the driver paid during the introductory period, even if the insurer does not call the change a surcharge. “No surcharge” is not necessarily the same as “your bill cannot rise from today’s amount.”

Carrier rules differ. The Maryland analysis reported that Allstate, GEICO, Liberty Mutual, Progressive, and Travelers could raise premiums for poor telematics scores. American Family, Farmers, Nationwide, State Farm, and USAA said they would not. Terms can vary by state and change over time, so this list is not a substitute for the current documents governing a particular policy.

Before activating a program, get written answers to four points: whether the result can raise the premium, whether an initial discount can disappear, when the monitored price takes effect, and what happens after withdrawal or insufficient data.

Your Normal Routine Determines the Fit

A strong candidate generally drives relatively few miles, travels mainly during the day, avoids phone handling, and brakes, accelerates, and corners smoothly. No source cited here establishes a universal mileage cutoff or a formula that converts those habits into a reliable probability of saving.

A careful driver can still be a weak fit. A long-distance commuter may score well for smooth driving but poorly under a mileage-heavy formula. A night-shift worker cannot easily avoid late trips. Dense traffic can produce hard-braking events even when braking was the correct defensive response.

Do not compromise safe driving to improve an app score. Responding properly to a hazard takes precedence over avoiding a recorded braking event.

The program should be evaluated against ordinary, unavoidable travel—not an unusually quiet trial week. Relevant weak-fit signals include high mileage, frequent nighttime travel, regular phone handling, repeated congestion-related braking, and difficulty correcting trips incorrectly attributed to the policyholder.

Phone-based systems may classify a passenger trip, bus ride, rideshare, or journey in another vehicle as the policyholder’s driving. Before enrolling, determine whether trips can be reclassified, how quickly corrections must be made, who reviews disputes, and what happens when permissions fail or the phone is replaced.

Compare Final Premiums Rather Than Discount Percentages

A percentage discount matters only if it produces the lowest suitable total premium. The comparison should use equivalent drivers, vehicles, limits, deductibles, optional coverages, and policy dates.

Consider the draft’s hypothetical example. Insurer A starts at $2,400 annually and applies a hypothetical 20% monitored discount, cutting the price by $480 to $1,920. Insurer B offers equivalent conventional coverage for $1,750. Even after the full hypothetical discount, the telematics policy costs $170 more per year.

A smaller discount can work when the starting quote is competitive. If Insurer C quotes $1,800 before telematics and a conventional competitor quotes $1,825, a hypothetical 5% discount reduces Insurer C’s cost to $1,710. The resulting difference is $115 annually.

These percentages illustrate the calculation; they are not presented as typical outcomes. The examples show why the base quote is as important as the monitored adjustment.

For each offer, compare five items:

• The annual premium before telematics
• Any temporary enrollment discount
• The possible post-monitoring premium
• Device costs or participation conditions
• The best equivalent non-telematics quote

For a behavior-based program, plan around favorable, neutral, and adverse outcomes. The favorable case provides a lasting reduction. The neutral case leaves the price approximately unchanged or removes an introductory incentive. The adverse case creates a higher or uncompetitive price where the program permits it.

Repeat the comparison at renewal. Compare the full renewal premium—not the first discounted bill—with current conventional quotes for equivalent coverage.

Tracking Is Part of the Price

The financial benefit is uncertain, but data collection begins once the program is activated. Depending on the terms, the record may include detailed location, routes, travel times, mileage, speed, braking, acceleration, cornering, phone activity, and vehicle information.

The Maryland report found that five surveyed insurers collected telematics information directly and 11 used third-party companies. That does not establish misuse. It does mean the customer should identify every organization handling the data and read the applicable privacy terms.

Ask how long raw trips and scores are retained, what uses are permitted, whether information is shared beyond the insurer and its service providers, and what happens to existing records after withdrawal. Do not assume that enrollment creates a right to access, correct, or delete every record; verify the agreement and applicable law.

The available evidence does not establish that insurers routinely sell telematics data, deny claims because of it, or use it for nonrenewal. Those claims should not be inferred without policy-specific evidence. The relevant question is what the current contract permits and what controls apply to the insurer and any service provider.

Privacy tolerance can make an otherwise plausible discount unattractive. One driver may accept tracking under a temporary, discount-only program with clear data limits. Another may reasonably decide that uncertain savings do not compensate for continuous location and behavioral monitoring.

A Defensible Opt-In Rule

Telematics is most plausible when the insurer’s underlying quote is already competitive, normal driving aligns with the disclosed scoring factors, the downside is limited, trip errors are easy to correct, and the monitoring terms are acceptable.

It is less attractive when a fixed commute creates high mileage or nighttime travel, the program can impose a surcharge without explaining its scoring, the app is likely to misclassify trips, or an equivalent conventional policy already costs less.

Before enrolling, request the current program guide and confirm:

• Whether an unfavorable score can raise the premium
• Whether an enrollment discount can expire or shrink
• Which behaviors and trip details are recorded
• Whether monitoring is temporary or continuous
• How passenger trips and false events are corrected
• Who receives the data and how long it is retained
• What happens to the price and data after withdrawal

Deleting an app may not formally end participation. Follow the insurer’s withdrawal procedure, revoke any connected-vehicle authorization, return a device if required, and obtain confirmation that monitoring has ended.

The Maryland evidence supports a scoped verdict: telematics saves some drivers money, but it should not be treated as an automatic safe-driver discount. In the only public state distribution cited here, no change was the largest outcome, fewer than one-third received a decrease, and almost one-quarter paid more.