Many of the largest insurance companies in the United States offer drivers the chance to lower rates with better driving habits, a system often called usage-based insurance (UBI) or telematics. Insurers will collect data, tracking your driving with a phone app or a device that plugs into your car, and adjust rates based on a range of factors.

Liberty Mutual's RightTrack program is our top pick among usage-based insurance programs because of stable prices once the discount is set, a short review period and one of the highest potential discounts. Nationwide's SmartRide program is a close second, offering an even greater maximum discount and a shorter-than-average period when driving habits are tracked before a rate locks in.

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Best for overall UBI program: Liberty Mutual

Liberty Mutual earned our recommendation for the best usage-based insurance program ahead of Nationwide because of a combination of potential discounts and maintaining driver privacy.

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Liberty Mutual's RightTrack program takes the top spot because of its combination of higher potential discounts, a short period of tracking driving and a fixed discount after that initial period. Drivers with RightTrack can lock in their discount after only 90 days and will retain the savings as long as they hold onto their policy. Drivers can save up to 30% on their policies, one of the best figures in that category. RightTrack also monitors fewer behaviors than many other UBI programs.


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The Nationwide SmartRide program is our second pick because it offers consumers the best chance to get a large discount, up to 40% for most drivers. It also has a shorter-than-most monitoring period of four to six months. That means after an initial period, drivers lock in their discount for as long as they hold onto the policy. Nationwide does not track phone usage, but it tracks idle time as an indicator of driving in congested traffic.


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State Farm's Drive Safe & Save trails both Liberty Mutual and Nationwide in part because it monitors drivers in perpetuity, adjusting discounts every policy period. Phone usage also impacts a driver's discount. It makes up ground by offering a maximum discount of up to 30% on a premium for most drivers and up to 50% for high-mileage drivers. State Farm also does not penalize you for driving more, unlike some UBI systems.


Best for potential savings: Nationwide

Maximum discounts with UBI programs

We found Nationwide to be the best usage-based insurance company for outstanding drivers looking for the largest discounts because drivers with Nationwide's SmartRide program can save up to 40% on their premium with good driving habits. That's the highest base percentage listed among major insurer UBI programs.

State Farm Drive Safe & Save has a maximum discount of 30% for most drivers and up to 50% for high-mileage drivers. Liberty Mutual also has a maximum discount of 30%.

This does not mean drivers are guaranteed to get the maximum discount or close to it. Companies often provide an initial discount for participating and then assess after multiple months of tracking.


Best to avoid surprise rate changes: Liberty Mutual

Both Liberty Mutual's RightTrack and Nationwide's SmartRide lock in a driver's discount after a given period of time — 90 days for Liberty Mutual, four to six months for Nationwide. That means once a driver locks in a discount on their annual price, they can maintain that drop in price as long as they stay with the company. In addition, both insurers guarantee that drivers will not face rate increases from participation in the program.

Geico's DriveEasy program and Progressive's Snapshot also lock in discounts after an initial monitoring period, but each brings the risk of premiums going up. Liberty Mutual and Nationwide only offer discounts as part of a UBI program.

This locked-in discount stands in contrast to companies such as State Farm, Allstate and USAA. With these companies' UBI programs, the discount for each renewal period reflects the driving habits across the previous six or 12 months.

We recommend Liberty Mutual as the best usage-based insurance company for inconsistent drivers and those looking to lock in a discount. Liberty Mutual ultimately edges Nationwide, as Liberty Mutual tracks fewer driving habits.


Best for privacy: Liberty Mutual

How long your driving will be monitored

  • Liberty Mutual: 90 days
  • Nationwide: Four to six months
  • Geico: First policy period, typically six months
  • Progressive: First policy period

Every company that offers usage-based insurance is going to track you to gather data on your driving. However, Liberty Mutual earned our recommendation for the best usage-based option for privacy because Liberty Mutual does it for the shortest period of time, only three months, and does not require you to be tracked again as long as you maintain your policy.

In comparison, Nationwide tracks your driving habits for four to six months. Progressive Snapshot collects information on your driving for the first policy period.

Many other usage-based insurance programs track and review your driving each renewal period. This means your driving will be monitored continuously.

Tips to get the best rates

The best way to maximize your discount is to pay attention to what your particular usage-based insurance program emphasizes and to be attentive to those factors when driving.

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The most commonly used factors UBI programs use to track driving and adjust discounts are:

  1. Hard braking
  2. Driving late at night
  1. How much a policyholder drives
  2. Phone use while driving

Nearly every company tracks hard braking and late-night driving, while the other two are less common. More accidents happen in the overnight hours, when drivers are tired and when alcohol is more likely to be involved. State Farm, Geico, Progressive and USAA all monitor phone usage.

A few other attributes are factored into various companies' calculations of UBI discounts.

  • Accelerating quickly
  • Cornering
  • Overall speed
  • Road type
  • Driving in heavy weather
  • Driving in traffic

The difference between usage-based and pay-per-mile insurance

Pay-per-mile insurance is a pricing arrangement in which part of the premium increases with each mile a policyholder drives. Usage-based insurance is a discount program that can reduce your rates in exchange for safer driving.

Both systems track your driving to a degree, although pay-per-mile uses considerably less data. Pay-per-mile reduces rates for infrequent or low-mileage drivers, while usage-based insurance does not always lower your price for driving less.

  • Pay per-mile: Policyholders pay a base rate and then a small cost, often less than 10 cents, per mile they drive.
  • Usage-based insurance: Drivers sign up for a base premium but can get a discount based on good driving habits. For the most part, it will not raise a driver's rates.

How to enroll

Many major insurers that have a usage-based insurance program offer it before providing a quote for a policy. You can also call your insurer to check if it offers a program.

Most UBI programs offer an app that uses your phone's sensors to track your driving. Some also allow drivers to use a device that plugs into their vehicle to track their driving.

Methodology

We examined several key factors in each company's usage-based insurance system: maximum discount available, length of review period, potential rate increases and how much data a company collects on drivers. The size of your discount will vary based on your driving and your overall premiums.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.