What Driving Data Do Usage-Based and Telematics Car Insurers Track?

As insurers increasingly offer usage-based car insurance, drivers are frequently asked to share operational vehicle data in exchange for lower premiums. While conventional auto insurance relies on historical rating criteria—such as age, location, driving history, and vehicle type—telematics technology allows insurers to observe real-world vehicle operation directly. Understanding precisely what information telematics programs collect, how they collect it, and how state insurance regulations protect policyholders is critical before enrolling.

Data collection practices differ substantially depending on the type of policy you select. A pure pay-per-mile policy primarily tracks odometer distance to calculate monthly billing, whereas comprehensive behavior-based programs monitor driving maneuvers to assign an ongoing driving score. Below is a detailed breakdown of the driving data points gathered by telematics programs.

The Core Telemetry Points Monitored by Insurers

According to the Insurance Information Institute, telematics programs measure driving behaviors that actuarial studies link to crash probability. Insurers assess risk through several key telemetry categories recorded during every vehicle trip:

While pure pay-as-you-go programs focus almost exclusively on distance, behavior-based telematics programs integrate these acceleration and time-of-day variables into proprietary algorithms. For instance, crash statistics compiled by safety organizations show elevated crash rates during nighttime hours and among youthful demographics, leading insurers to treat late-night transit as an elevated exposure factor.

Hardware Collection Methods: OBD-II Devices vs Mobile Apps

Insurers capture telemetry using three primary mechanisms: a plug-in OBD-II device, a mobile smartphone application, or integrated connected-car data embedded directly into modern vehicle dashboards. Each mechanism carries different privacy and measurement implications.

Plug-in OBD-II devices connect to the diagnostic port beneath your dashboard. They access vehicle computer readings directly, accurately recording true engine odometer numbers and speed without tracking GPS location unless an internal cellular locator is enabled. Conversely, smartphone telematics apps use the phone's internal accelerometer, gyroscope, and location services. While convenient, apps require continuous background permissions and must differentiate between driving, riding as a passenger, or traveling on public transit.

State Regulatory Limits on Telematics and Rating Factors

State insurance departments, working within guidelines monitored by the National Association of Insurance Commissioners, strictly supervise which rating variables insurers may use to adjust rates. Not every state allows insurance companies to set rates using the same telematics factors.

In California, for example, California Insurance Code § 1861.02 mandates that auto insurance rates must be determined primarily by three mandatory factors: driving safety record, annual miles driven, and years of driving experience. Because of these strict statutory standards, California does not permit insurers to alter premiums based on continuous driving performance metrics like cornering or speed fluctuations, keeping usage-based options focused strictly on verified mileage.

Furthermore, while many traditional rating components like credit-based insurance scoring are common countrywide—with Insurance Information Institute data showing credit scores lowered premiums for approximately 57% of drivers in state regulatory reviews—telematics offers an alternative where pricing reflects actual vehicle utilization rather than financial history.

Steps to Review an Insurer's Telematics Data Agreement

Before plugging a monitoring device into your vehicle or downloading a telematics application, take deliberate steps to review the program's terms and privacy disclosures:

1. 1

   Verify Mileage-Only vs Behavior Tracking

   Confirm whether the insurer is offering a pure pay-per-mile policy that tracks only miles driven, or a behavior-based policy monitoring braking, speed, and handling.

2. 2

   Check the Surcharge Policy

   Ask if poor driving scores can result in a rate surcharge at renewal, or whether the program guarantees that your rate will not increase above the standard baseline.

3. 3

   Review Location and GPS Practices

   Examine whether the insurer collects real-time geographic location coordinates or strictly measures velocity, deceleration, and distance traveled.

4. 4

   Confirm Trip Correction Procedures

   Ensure smartphone-based programs allow you to classify trips when you were a passenger in someone else's car or riding public transit to avoid unearned penalties.

To learn more about comparing plans that track driving performance versus those that track mileage alone, read our in-depth analysis on pay-per-mile vs telematics or explore our guide to who saves with pay-as-you-go insurance.

Terms: Telematics (usage-based insurance), OBD-II device, Connected-car data, Driving score, Pay-per-mile insurance