Does State Farm use telematics?

Telematics insurance is a type of car insurance that bases your insurance rate on how far and how safely you drive. Insurance companies use telematics to track your driving distances and behavior, and then use that data to assess how much risk the way you drive might pose. This risk assessment is then used to calculate your insurance premium.... read full answer

Your insurance company will provide you a “black box” device that attaches to your car, or an app that you can download to your phone. Both the device and the app then track your driving behavior – including speed, breaking and acceleration, among other factors. The black box device has a SIM card that records your driving information and sends that data back to the insurance company. The phone app uses your car’s GPS capabilities to record data on your driving behavior and sends it back to your insurer.

The company then uses this data to analyze how safe your driving behavior is and calculates your insurance premium accordingly. The safer and less you drive, the more you save.

Pay-as-you-go car insurance calculates a policyholder’s premium based on how many miles they drive each month. The policyholder’s mileage is tracked through a mobile app or device plugged into the vehicle, and customers who drive fewer miles pay a lower rate. Companies that offer pay-as-you-go car insurance, which can also be referred to as pay-per-mile or ... read full answerusage-based coverage, usually charge a monthly base rate and then add a fee for each mile driven.

Pay-as-You-Go Car Insurance Options

• Nationwide SmartMiles
• Allstate Milewise
• Metromile

Other major insurers offer usage-based programs that give drivers a discounted rate based on various driving habits, including miles driven. If your annual mileage is lower than the average driver, you may also qualify for a low-mileage discount.

Who Should Consider Pay-as-You-Go Car Insurance

Pay-as-you-go car insurance is often a good investment for people who don’t drive frequently, like students and seasonal workers. To learn more, check out WalletHub’s guide to usage-based insurance.

To get the State Farm low mileage discount, a customer must drive fewer than 7,500 miles per year. Exactly how much State Farm’s low mileage discount can save a customer depends on many factors, like their address, car type, and driving history.

How to Get the State Farm Low Mileage Discount... read full answer

1. Drive fewer than 7,500 miles per year.
2. Provide odometer information to a State Farm agent, who will call to verify the reading. Agents call to verify odometer information when it’s time to renew a policy, and sometimes mid-term.
3. Confirm your low mileage discount is being applied to your bill. It will last as long as you continue to drive fewer than 7,500 miles annually.

How State Farm Verifies Low Mileage

To verify a customer meets the annual mileage requirement, a State Farm agent will contact the customer to collect their odometer information for the past year. State Farm will then continue to contact the customer periodically to collect the car’s odometer readings. If those readings show the customer has increased their driving to more than 7,500 miles per year, they will lose the discount.