Ranked: Car Insurance Companies With the Best Discounts for Safe Drivers

Car insurance premiums are getting higher every year. Now more than ever, you need to make sure you're getting every discount you can.

If you're a cautious driver, then you may be able to save a lot of money with telematics car insurance. This uses technology (either a plug-in device or a smartphone app) to track your driving habits. If you avoid risky behaviors like speeding, hard braking, and using your phone while driving, then you'll be rewarded with discounts.

Some drivers save hundreds of dollars a year with telematics.

Below are three car insurance companies that offer big discounts for safe drivers -- and already have low average premiums before the discount.

1. Nationwide SmartRide®

Highlights

• Nationwide SmartRide® users can save up to 40% on their premiums. That's the biggest safe-driving discount I've found.
• Customers can get a 10% to 15% discount just for signing up.
• There's no penalty for risky driving behaviors; your premium will not go up by using SmartRide®.
• You can choose between a smartphone app or an easy-to-install device.
• You only need to participate in SmartRide® for four to six months to earn a discount.

Note: If your driving habits don't qualify you for a discount, then the discount you got at enrollment can be taken away when your policy renews.

2. State Farm Drive Safe & Save®

Highlights

• Safe drivers can get up to 30% off.
• Customers get a 10% discount for completing the setup.
• There's no penalty for risky driving behaviors; your premium will not go up by using Drive Safe & Save®.

Drive Safe & Save® uses a smartphone app and a small Bluetooth device that sticks to your windshield.

This is an "always on" telematics program. Your discount is adjusted at each policy renewal (typically every six months). You can opt out of Drive Safe & Save® at any time, but you will lose any discount you've earned.

Bonus: State Farm customers may also be eligible for discounts if they:

• Take a defensive driving course
• Go three years without a moving violation or at-fault accident

3. Progressive Snapshot

Highlights

• Users save an average of $322 per year, according to Progressive.
• New Progressive customers can get a discount for enrolling (amount not specified).
• You can choose between a smartphone app or an easy-to-install device.

You need to keep Snapshot active at all times to earn and maintain a discount. Warning: Your premium can go up if Progressive decides you're a high-risk driver.

Still, Progressive customers have reported saving hundreds of dollars per year using Snapshot.

Important things to know about telematics car insurance

Most telematics insurance programs have certain things in common:

• The more miles you drive, the lower your odds of getting a discount.
• Frequent nighttime driving will likely count against you, too.
• Your location must be shared with your insurer whenever you're driving.
• Telematics smartphone apps automatically run in the background while you drive (even if you're not driving your own car).
• Trying to circumvent telematics (by uninstalling the smartphone app, removing the plug-in device, etc.) can cause you to lose any discount you've earned.
• Discounts can vary by state and may not be available at all in some states.

So make sure you understand the rules of your insurer's telematics program before you enroll -- especially if there's a chance your premium could go up.

Don't pass up easy savings

The insurance companies above offer real savings for customers with low-risk driving habits. And all of them have competitive prices to begin with.

Nationwide SmartRide® offers the biggest discount, doesn't require you to use it forever, and also can't make your premium go up. But that doesn't mean Nationwide is the best auto insurance provider for you.

Plenty of car insurance companies offer safe driving discounts, and you may get a lower premium somewhere else. So make sure you shop around to compare quotes from the top carriers. You may find out you could be saving hundreds of dollars a year.