Evan Ullman for CheapInsurance.com

Understanding telematics: How your driving behavior influences insurance rates

Telematics uses technology to track how people drive and how often they use their vehicles. In auto insurance, it’s the backbone of usage-based insurance , sometimes called pay-as-you-drive, pay-how-you-drive, or behavior-based insurance. Instead of relying on fixed stats like age or ZIP code, premiums are based on actual driving habits. CheapInsurance.com breaks down how these programs work, what benefits and risks they bring, and how drivers can decide whether opting in makes sense.

Rising importance in the 2024-2025 market

Telematics has been picking up steam in insurance over the past few years. A mid-2025 report from Global Market Insights put the global insuranc

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