MoneyGeek Survey:

Drivers Are Open to Adopting Telematics for Savings, so Why Are so Few Opting In?

Updated: November 1, 2024

Advertising & Editorial Disclosure

With inflation on the rise, car insurance telematics programs may seem like an easy way to secure cheap auto insurance and create safer roads. In a randomized study of 174 drivers over 28 weeks, those who received driving feedback and incentives via telematics experienced a statistically significant reduction in risky driving behavior.

But do drivers trust their insurance companies with their driving data? It turns out that depends on your age, driving habits and insurance carrier. MoneyGeek conducted a nationally representative survey of over 1,000 motorists to better understand consumer attitudes toward telematics programs.

Key Findings

 

MoneyGeek's survey results indicated that while younger consumers embrace driving tracking as a way to leverage data and lower costs, older generations prefer traditional insurance pricing methods — despite possible savings and price escalation. Here are some of our other findings.

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39% of drivers would opt into telematics for just a 5% discount on their premium, including 48% of Gen Z and 47% of millennial drivers.

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51% of drivers are willing to let insurers track their driving for decreased insurance premiums, but 33% aren’t.

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Gen Z drivers were the most open to telematics tracking (54%), followed by millennial drivers (52%). Baby boomers and Gen X drivers were the least enthusiastic about tracking, with 36% and 30% saying they wouldn’t participate in telematics to lower their car insurance costs, respectively.

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Approximately 1 in 2 people see themselves as better drivers than most drivers; still, nearly 1 in 3 of these individuals aren't comfortable with driving tracking. 45% of survey respondents considered themselves to be better drivers than 80% of drivers, but 30% of these individuals wouldn’t be willing to let insurers track their data.

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Over half of all drivers fear the misuse of their data. The most common reservations drivers had about telematics was their driving data being used against them for legal purposes, exposed during a data breach or used for marketing. Perhaps this is why the fewest percentage of drivers (25%) were willing to allow their location — a potentially dangerous piece of data to have exposed — to be tracked.

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Most drivers don't want risky driving behaviors tracked. Nearly 70% of respondents weren't comfortable with their acceleration, hard braking/cornering or phone usage data being tracked.

39% of Drivers Would Adopt Telematics for a 5% Discount

As the average cost of car insurance continues to rise, the question that both drivers and auto insurance companies want answered is: what percent of savings would make telematics tracking worth it? The short answer is that it only takes an auto insurance discount of 5% for 39% of people to accept telematics.

However, almost as many respondents (37%) indicated that no amount of discount is enough for them to enable tracking devices.

Some generations seem to be more willing to adopt telematics for a discount than others; nearly half of Gen Z (48%) and millennial drivers (47%) would enroll in a telematics program for a 5% discount, compared to 38% of Gen X and 31% of baby boomer drivers. Baby boomers were the most likely to report that no amount of discount would convince them to adopt telematics (44%).

Drivers Are Afraid Their Data Will Be Used Against Them

While automotive technology can make you safer and save you money, MoneyGeek’s survey results indicate that consumers are still apprehensive about sharing their driving data with insurance companies.

From hit-and-runs to robberies and divorce proceedings, there have been many cases where telematics data was used as evidence in litigation. When asked what aspects of telematics they had reservations about, over half (58%) of drivers expressed concern about their information being used for legal purposes. This was the top fear among Gen Z (52%), millennial (57%) and Gen X (57%) respondents.

With financial services as the second most targeted industry for cyber attacks, 57% of drivers surveyed by MoneyGeek expressed concern about a breach of privacy. This reservation was most pronounced among baby boomers, with 68% citing it as a fear.

Another 56% worried that their telematics data would be used for marketing purposes. This worry was the most common telematics-related fear among baby boomers, with 70% listing it as a reservation, compared to 54% of Gen X, 50% of millennial and 46% of Gen Z drivers.

What’s Holding Drivers Back from Adopting Telematics?

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    Data Being Used for Legal Purposes: 58% Overall

    • Gen Z: 52%
    • Millennials: 57%
    • Gen X: 57%
    • Baby Boomers: 61%
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    Data Being Exposed During a Data Breach: 57% Overall

    • Gen Z: 48%
    • Millennials: 53%
    • Gen X: 56%
    • Baby Boomers: 68%
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    Data Being Used for Marketing Purposes: 56% Overall

    • Gen Z: 46%
    • Millennials: 50%
    • Gen X: 54%
    • Baby Boomers: 70%

Are Drivers Willing to Have Their Risky Driving Behaviors Tracked?

The National Association of Insurance Commissioners (NAIC) highlights the following as the factors measured through telematics that are of most interest to auto insurance underwriters: miles driven, time of day, location, rapid acceleration, hard braking, hard cornering and airbag deployment.

Our survey results indicate that, as with other technologies, consumers are willing to share certain types of data, but not all.

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Drivers are least inclined to share their:
  • Location (25%)
  • Acceleration (31%)
  • Hard braking or cornering (32%)
  • Phone usage while driving (33%)
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Drivers feel most comfortable sharing their:
  • Mileage traveled (51%)
  • Time of day driving (42%)
  • Frequency and duration of driving (41%)
  • Speed (39%)

Nearly 70% of all survey respondents weren't willing to have markers of risky driving — including acceleration, hard braking/cornering and phone usage while driving — tracked. This data stands in spite of the fact that 45% of respondents believed they were better drivers than 80% of the population.

Despite Telematics Hesitations, Baby Boomers Are More Open to Some Types of Tracking

While baby boomers are the least open to telematics overall, they were more willing to have certain types of data tracked than younger generations. For example:

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    39% of baby boomers would allow their insurer to track their phone usage while driving, the highest percentage of any generation.

    Just 35% of Gen X drivers, 27% of millennial drivers and 26% of Gen Z drivers were willing to have this data tracked.

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    54% of baby boomers would be willing to track mileage traveled.

    Compare this to 44% of Gen X and 48% of Gen Z drivers, the two generations that are least willing to allow their mileage traveled to be tracked by insurance providers.

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    47% of baby boomers would allow their insurance company to monitor the time of day they drove.

    Just 40% of Gen X, 43% of millennial and 34% of Gen Z drivers were willing to have this data tracked.

Ask the experts:

Are telematics policies especially attractive or unattractive for young drivers?

Clinical Assistant Professor at The University of Texas at Arlington

This is an option that some companies use to keep insurance costs lower for young drivers. However, be careful. Everything you do gets recorded once you agree to install a device in your car. For instance, your driving patterns include unsafe driving, such as speeding or parking in unsafe locations.

Telematics policies also involve using a device to monitor driving behavior and can be attractive to young drivers who exhibit safe driving habits. If they prove to be responsible and low-risk drivers through telematics data, they may qualify for discounts. On the other hand, young drivers who have riskier driving behaviors might find telematics less appealing, as it could result in higher premiums if their driving data indicates a higher risk of accidents or unsafe habits. You must be very clear about giving up a little bit of your freedom for cheaper insurance costs.

Clinical Assistant Professor at The University of Texas at Arlington

Telematics programs should be attractive to young drivers. Some young drivers like to drive aggressively and may not be interested in them. However, usage-based programs encourage drivers to practice good driving habits to earn discounts.

Some telematics programs offer a discount for using the program regardless of how you drive. If you have bad habits, you won’t get an additional discount, but you won’t have to worry about higher insurance premiums. Some companies, however, may raise your premiums if usage-based monitoring reveals that you practice riskier habits than usual.

Besides the discount, one of the beneficial features of telematics is that most drivers report driving more safely just because they know they’re being monitored. Another benefit is that the insurance provider will send a report so the driver can learn where to improve and what they’re doing well.

Clinical Assistant Professor at The University of Texas at Arlington

Telematics policies, also known as usage-based insurance, are becoming increasingly popular in the auto market. Insurers can provide personalized pricing by monitoring individual driving behavior through a plug-in device or mobile app. Overall, young consumers are more receptive to new technologies and might prefer the “cooler” insurtech companies over legacy auto insurers. The potential premium savings and the flexibility in customization also make these policies particularly attractive to young drivers.

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Expert Insights

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Methodology

MoneyGeek surveyed a nationally representative sample of 1,194 drivers who own or lease a vehicle to explore their sentiment towards safe driver programs; these programs track driver data, including mileage, time of day driving, duration, speed, phone usage and location.

Of our survey respondents, 10% were Generation Z, 31% were millennials, 32% were Generation X and 26% were baby boomers. This survey sample was balanced to be representative of gender, age and income demographics of the United States.

If you have any questions about our findings or methodology, please reach out to Melody Kasulis via email at melody@moneygeek.com.

About Lucia Caldera


Lucia Caldera headshot

Lucia Caldera, the founder of Corporate Media Lab, has 10 years of experience in financial planning, management and advising. She writes finance content for MoneyGeek, using her personal finance background to help readers achieve financial wellness.

Lucia holds a master’s degree in international political economy and development from Fordham University and a bachelor’s degree in economics from Clark University. Her work reflects her passion for using financial education to reduce the wealth gap for women and minorities.


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