How Nationwide Uses Telematics to Help You Save Money on Car Insurance

Some of the best cheap car insurance companies are offering a special new way to protect you from the costs of a car crash: it's called "telematics." With telematics car insurance, you can sign up to share some of your driving data with the insurance company. By tracking your driving data, the insurance company can see how safe of a driver you are, and might give you big discounts on car insurance.

Let's look at how Nationwide, one of our picks for America's best cheap car insurance companies, uses telematics for drivers that want to be rewarded for safe driving.

Nationwide's telematics car insurance: SmartRide®

The SmartRide® program is a special telematics car insurance option that Nationwide customers can choose to join. By signing up for SmartRide®, you can be rewarded for safer driving. You just have to agree to let Nationwide measure your driving behavior with a plug-in device on your vehicle or the SmartRide® mobile app.

After you sign up for SmartRide®, Nationwide sends you a small device that plugs into your car. This SmartRide® device measures a few types of driving data, including:

• How many miles you drive: The more miles you drive, the more at-risk you are for a car accident.
• How much you drive at night: Nighttime driving is less safe than driving in daylight hours.
• How fast you accelerate: Watching your speed can help you avoid costly collisions and higher car insurance premiums.
• How hard you brake: Maintaining a safe following distance is another easy way to avoid expensive fender benders.
• Idle time: The more time your car spends idling in "stop-start" traffic, the more risk you might have for collisions.

You can track your progress in the SmartRide® app to see what your estimated car insurance discount will be, based on your current driving data. Your estimated discount will be updated each week. After about four to six months, you can lock in your car insurance discount -- which could be up to 40%.

Nationwide telematics car insurance: Pros and cons

Every car insurance company that offers telematics has some unique benefits and possible downsides. Let's look at a few for the Nationwide SmartRide® program.

Nationwide SmartRide® pros

• Limited time commitment: You don't have to leave devices attached to your car forever. The SmartRide® program should be able to track enough data to confirm your discount within four to six months. Most drivers only need 80 days to earn their safe driving discount.
• No premium increases: Unlike some other car insurance companies' telematics programs, SmartRide® cannot increase your premium. Depending on your driving data, your discount might end up being $0. But even if you're accelerating too fast, braking too hard, and driving all night, your premium will not go up as a result of participating in SmartRide®.
• Instant discount: You get an immediate car insurance discount of 10% just by signing up for SmartRide®. Depending on your driving data, you can then earn a higher discount for safe driving.
• Well-reviewed mobile app: The Nationwide SmartRide® app is rated 4.5 out of 5 stars on Google Play and 4.6 out of 5 stars on the App Store.

Nationwide SmartRide® cons

• Big discounts are not guaranteed: Don't count on a 40% discount, even if you're a super-safe, slow-to-accelerate, gently braking driver. Some Nationwide customers on Reddit have complained that they couldn't qualify for the full 40% discount, no matter how hard they tried. If you read the fine print on the Nationwide website, it says that SmartRide® discounts don't apply to all elements of coverage, and rules are different by state.
• It takes time to get your discount: When you go through the SmartRide® program, you earn a discount that gets applied to your next policy renewal. So don't go into this assuming that you'll get immediate savings in your monthly budget.
• Driver data doesn't apply to a new vehicle: If you go through the SmartRide® program and then get a new car, your SmartRide® discount does not carry over to that new vehicle. You would need to do the SmartRide® program again to earn a discount by showing how safely you drive in the new vehicle. This might not seem fair, but think of it this way: what if your old car was a slow-moving 20-year-old minivan, and you replaced it with a souped-up Ford Mustang? Different cars are more (or less) expensive to insure, and sometimes people drive better (or worse) in different vehicles.
• Not available in some states: The Nationwide SmartRide® program is not available in Alaska, California, Hawaii, Louisiana, New York, or Puerto Rico. Contact Nationwide or talk to your insurance agent if you have questions about whether you can sign up for telematics with Nationwide.

Bottom line: If you're looking for an easy way to save money on car insurance without canceling extra coverages or raising your deductible, telematics car insurance could help. The Nationwide SmartRide® program offers significant car insurance discounts, without the risk of raising your premium.