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Are Car Insurance Trackers Worth It?


It’s becoming more and more common for people to trade their personal information for opportunities to save money. Examples include:

  • Sharing your email address to receive coupons
  • Signing up for supermarket shopper cards to get money off groceries
  • Allowing online retailers to track your browsing habits so you’re alerted when prices drop.

Would you accept a discount from your insurance company in return for sharing personal information about your driving habits?

That’s exactly what happens when you take advantage of an offer to install a tracking device in your car in exchange for an opportunity to reduce your premiums or receive rebates.

The beginnings

Tracking devices are not new. Progressive launched their Snapshot program almost 20 years ago and millions of customers have taken advantage of it since.

For 15 years, Progressive used the program to encourage safe driving habits by giving discounts to good drivers. Things changed in 2013 when the company began leveraging the data to penalize unsafe drivers.

Over the years, other insurance companies implemented similar programs, with some using smartphone technology rather than tracking devices. Financial incentives and penalties differ significantly from company to company.

It takes approximately six months of data for most insurers to determine whether you’re a safe driver. Most companies will allow you to opt out of a program if you find it’s not saving you money. However, it’s usually not a smart move. The damage has already been done. The company has identified you as a poor driver and you not be able to demonstrate improved driving habits without a tracker

Warning: If your insurance company is notified the tracking device has been disconnected, you will lose any discounts you’ve earned.

How it works

Trackers are small devices that connect into your vehicle’s on-board diagnostics port (OBD-II port). It’s the same port mechanics use to identify issues with your car. The devices work with most vehicles built in the last 25 years that have OBD-II computer systems.

Once the device is plugged in, it can see all the data in your car’s computer. It’s programmed to collect and transmit any your insurance company finds valuable so it can be analyzed.

Note: Certain vehicles equipped with newer versions of the OnStar system don't need a tracking device to communicate with insurance companies. OnStar is able to connect direct.

What is tracked

Most insurance companies do not reveal exactly what information their devices track. However, you must be aware that a tracker can find, store and transmit anything on your vehicle’s computer. You need to think about how much information you’re comfortable sharing with your insurer.

Insurance companies typically collect data that reveal a driver’s habits, including:

  • when the car is used
  • how far it’s driven
  • time spent driving
  • driving speed
  • incidents of hard braking
  • the location of the vehicle.

In newer vehicles with advanced safety features, the tracker may gather information about how often the automatic emergency braking and forward collision warning systems are activated.

That data collected from your car is matched to a database that contains information about speed limits and other traffic controls in locations across the United States. Your insurance company can then determine whether you regularly do things like speeding or rushing red lights. GPS data also helps your insurer know if your drive in areas where there is a higher risk of vehicle theft or accidents.

What you need to know

If you’re considering using a tracker to save money on your auto insurance, you should review your insurer’s privacy policy. You'll want to check what type of information is collected and monitored and who they are allowed to share information with. Can they, for example, pass it on to advertisers who are interested in where and when you drive so they can better target and promote their products?

In the end, it’s up to you to decide what information you want to share to earn a discount — or if you want to share any at all.

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Kelsey Harris

Associate Writer

Kelsey joined the Wavez staff in June 2019 and has been impressing readers ever since. She graduated from USC with a bachelor's degree in English and specializes in our Health and Finance categories.