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What Is Insurance Telematics?

Updated March 5, 2024 . AmFam Team

Telematics. It’s one of those high-tech, futuristic-sounding words tossed around these days, but not many people seem to have a grasp on what it means. In relation to car insurance, telematics is a form of technology in your vehicle that can capture and process the details of your driving habits.

Learn more about insurance telematics and how it can help you take control of what you pay for your insurance — and even help make you a better driver!

How does telematics work?

A telematics device — more commonly called a car insurance tracker, safe driving app or other names in that vein — uses GPS or an accelerometer to collect data about your driving habits. In some cases, this may be a small device that is installed in your car; more and more frequently, it can be as easy as an app you install on your smart phone!

The device or app monitors things like:

  • Your location
  • The number of miles you drive
  • How quickly you brake or accelerate
  • The time of day you’re driving

All this information is collected and sent back to your car insurance company for review to monitor your safe driving skills.

This kind of car insurance tracking is also known as usage-based insurance (UBI) or “pay how you drive.” In other words, UBI helps put you in control of what you pay for car insurance, because your premium is influenced by your driving behaviors. And the best part is, depending on your driving habits, you can save money on your car insurance!

Because safer driving means fewer accidents and greater savings, many usage-based insurance programs are designed to help you build safer driving habits.

Worried your driving habits won’t qualify you for a discount? The transparency that UBI programs offer help you pinpoint exactly which behaviors you need to improve to start saving on your car insurance. Think of it as personalized driving feedback designed to help you be safer on the road and save more on your car insurance!

DriveMyWay*: American Family’s Usage-Based Insurance Discount

Did you know that American Family Insurance offers a usage-based insurance discount?

We want to empower you to take control of your savings and recognize your safe-driving habits! It’s why we offer DriveMyWay®, which can reward you with a discount on your auto insurance premium depending on how well you drive.

DriveMyWay is a convenient smartphone app that doesn’t need a separate device. That means rather than installing something into your vehicle, all you need to do is download the DriveMyWay app to get started.

The DriveMyWay app will monitor your driving behavior, from braking to speeding and other important actions. American Family will use the feedback on your driving behavior to determine your discount. The safer you drive, the more money you can save on your car insurance premium!

If you drive safely, you can save up to a 20% discount after the DriveMyWay trial period. There’s more good news: You’ll get an introductory 10% discount just for enrolling. There’s a lot to learn about our DriveMyWay program — take a closer look at how it works and see how you could start saving today.

What are the benefits of using DriveMyWay?

In addition to a potential discount on your car insurance premium, there are a number of benefits for using our DriveMyWay app. First things first, you'll have the opportunity to become a safer, smarter driver.

Since your discount depends on your driving habits, you’ll become more aware of things like your speed, braking, cell phone use and traveling at night. Since everything is tracked through the app, you can review your driving habits to see what it will take for you to become a better driver — and to get a higher discount! Other benefits include:

  • Slower accelerations and fewer hard stops can lead to better fuel economy
  • Safer driving can help maintain your vehicle and reduce damage to things like your brakes and tires
  • Reducing distracted driving behaviors like texting can make you a safer driver
  • Helpful articles provide safe driving tips — with instant access straight from the app
  • Greater control over your car insurance premium: your driving habits, your discount — you’re in control of your savings

Did you find this article helpful? Learn more about car insurance tracking devices work!

Still have questions about DriveMyWay? Check with your American Family Insurance agent to learn more about how our DriveMyWay program rewards you for being a safer, smarter driver. Remember, you can earn up to a 20% discount on your car insurance premium!

This article is for informational purposes only and includes information widely available through different sources.

*Rate will vary based on driving behavior. Unsafe driving behaviors may increase your rate. Product eligibility will vary by state, vehicle type, policy form and company underwriting the auto policy. Some restrictions may apply. The DriveMyWay rate factor applies only to these coverages, which are typical for most auto policies: bodily injury liability, property damage liability, collision and comprehensive, medical expense, and personal injury protection. Additionally, the rate factor does not apply to fixed fees that are part of the policy. To refresh your understanding of coverages, visit the Car Insurance Coverage page. Customer driving behaviors from the KnowYourDrive program were used to inform rate structure. Adding or removing drivers from a policy may impact the overall score. Households where not all eligible participants on the policy are enrolled will receive a 5% introductory discount.
If you unenroll drivers after the 100-day trial period ends, we’ll still use their driving behavior at the time of unenrollment when calculating your rate.

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