It's a tech-savvy world out there and some of the nation's top car insurance companies are cashing in on it in order to pass the savings down to you. Through the optional use of technological devices intended to monitor your driving habits, some insurance carriers are rewarding you for good behavior on the road. Here's what you need to know about the new programs and potential discounts.  

How They Watch You

While the tracking methods are different for each company, the general concept is the same across the board. A small device is plugged into your car's data collection port, allowing your car to send information about your driving habits back to your insurance carrier. This means that your insurance provider has firsthand information about:

  • What time of day you drive
  • How many miles you drive
  • How fast you brake and accelerate
  • How many times you exceed 80 miles per hour

While safe driving habits can offer significant savings, most insurance carriers stress that unfavorable information from the device won't increase your rates. However, those who repeatedly fail to meet the low-risk driver guidelines can expect to lose their safe driving discounts.

How Much Can You Save?

The national average for annual car insurance coverage is about $1510. While each participating carrier is different, most qualified drivers could save between 10%-30% on their premiums.

Privacy Concerns

Many people are reluctant to allow a car insurance company to track their every move and concerns about privacy are a huge deterrent for those who might otherwise be interested in this technology. Fortunately, carriers say that their monitoring devices don't contain GPS tracking units, meaning that they know how you drive, but not where.

Who Can Benefit the Most?

While all safe drivers will score some savings, the people who tend to benefit the most are the ones who traditionally pay the highest rates: teen drivers, single men, people with less than stellar driving records and those with long commutes each day.

Non-Technological Alternatives

Some insurance providers allow you to save based on your odometer readings rather than your driving habits. The less you drive, the more you'll save. Savings can be just as substantial, although to qualify for the highest discounts, you'll need to drive less than 2500 miles a year.

Top car insurance companies have found a way to use technology to their benefit but they're not the only ones cashing in on the new trends. For safe drivers willing to prove their prowess on the road, the discounts can be dramatic.