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By Cheryl Knight
Updated on Jun 27, 2022
Reviewed by Carrie Adkins, VP of Content.
It's a fact that people who drive safely pay lower overall rates on their car insurance. In fact, insurance companies actively encourage safe driving by offering a discount for doing so.
So-called safe-driving programs are just one way you can save on your car insurance. Another great way is to use the Jerry app, where you can find the cheapest quote estimates from top providers after only 45 seconds worth of effort.
Before you check out your insurance company’s safe-driver program though, here's what you should be looking for from this discount.
How do safe-driver discounts work?
Safe-driving discounts are just one more way your insurance company can save you on your car insurance.
These discounts go by different names based on your carrier, and they can save you up to 30% in some cases. But you have to do a little more than simply drive safely to get the discount.
Essentially, your insurance carrier will allow you to sign up for a discount program for safe driving, so long as you allow them to attach a device to your car and monitor your driving.
Beacon and telematics devices
When you sign up for a safe-driving discount, your insurer will send you a beacon device (otherwise known as a telematics device) that you place in your car. The beacon then tracks your speed, driving style, and location to determine exactly how you're driving. State Farm's "Drive Safe and Save" program is one example that uses a beacon device.
Some drivers are bothered by the fact that the beacon tracks their speed and position, but the device needs to do this in order to monitor how fast you're going compared to the local speed limit. Exceeding this speed limit by 10 MPH will make the device flag you as driving too fast, thus reducing your discount.
The beacon also determines how safe of a driver you are by monitoring how quickly you stop, accelerate, and make a turn. The goal is to remain smooth in your driving so you get the best discount. In addition to the beacon device, which usually sticks to your windshield behind your rearview mirror, you also must download a mobile app, or you can use OnStar if it's installed in your vehicle.
The app works in conjunction with the beacon device in your car to track how safely you're diving. It also records each trip that you take and offers after-trip reports to show how you did. A safe-driving app will usually show you where you went too fast or had a sudden stop, giving you an opportunity to improve your overall driving.
The app keeps a record of your driving between policy renewal periods and gives you a discount based on how safely you drove. Most of these programs offer a 5% discount just for using the program and can actually save you up to 30% if you're determined to be a very safe driver.
Once you opt into the program, you may have to wait until the next policy renewal period, usually six months, to see any savings. The biggest savings can come from how much you drive, with drivers who put 12,000 miles or fewer a year on their vehicle seeing the biggest discount.
Key Takeaway: When you sign up for the discount, you'll get a car beacon that, together with an app, tracks your speed, position, and driving habits. You could get 5 to 30 percent off your policy if it records favorable info, though it could take six months or so to show.
As technology evolves, the need for an entire device on your car may change. Some companies exclusively use an app to track driving habits, though these are never as comprehensive as a beacon or telematics device, so don't expect those to go anytime soon.
Are safe-driver discounts worth the effort?
In addition to the privacy concerns, some drivers also find the beacon device used to monitor your vehicle’s speed can give erroneous speed readings, though this is the exception and not the norm. Also, if you currently receive a discount for driving under a certain mileage and the device shows that you actually drive more than this amount, you could actually see an increase in your premium come renewal time.
Drivers should remember that you cannot use the mobile device associated with the safe-driving app while you're driving or your safe-driving rating will get dinged.
Overall, a safe-driving discount program offers just one more way for drivers to save on their auto insurance. And for even more savings, don't forget to check out Jerry, where you can compare quote estimates free of paperwork, free of charge, and save hundreds of dollars a year!