Safe drivers can save money on their premiums, but it may not be as easy as it sounds. Many auto insurers offer safe-driving discounts that can save drivers hundreds of dollars a year, potentially thousands over a lifetime. While these discounts provide substantial financial benefits to drivers, they are equally important for insurers, explains Maya Afilalo, an industry analyst at AutoInsurance.com. "Safe drivers save insurers money and lower their financial risk," Afilalo said. "These discounts are a financial incentive for customers to drive safely, which saves insurers more money in the long run." Understanding how these programs work and how to qualify is the first step toward earning a safe-driving discount.
How Safe-Driving Discounts Work
The modern safe-driving discount emerged in the 1990s when auto insurers began using telematics—gathering and transmitting driving data—to assess driver safety. Progressive was the first company to offer a telematics insurance product, but the technology did not gain popularity until the 2010s, when smartphones made tracking much less expensive, Afilalo noted. Telematics provides insurers with a granular, real-time risk assessment rather than relying solely on historical claims data. "It gives insurers a granular and real-time risk assessment rather than one based on historical claims data alone," said Joshua Morrison, an auto insurance advisor at Bad Driving. "Consequently, safe-driving discounts are more accessible and better aligned with real-world driving patterns for drivers who habitually drive low-risk."
Telematics programs typically require drivers to either download the insurer's app for tracking or plug a device into the diagnostics port above the driver's side floorboard. Another popular discount option is based on the driver's record, focusing on whether they have avoided infractions and accidents. Rather than using real-time data, insurers use past driving history to determine future rates.
How to Qualify for a Safe-Driving Discount
Generally, maintaining a clean driving record is the easiest way to earn a safe-driving discount. Avoiding accidents, speeding tickets, and DUIs can lead to lower premiums. However, earning savings through telematics is more challenging. Telematics monitors real-time driving habits, including speed, maneuvering, nighttime driving, hard braking, and cell phone usage, according to Franklin Manchester, principal global insurance advisor at SAS. Telematics also analyzes how much you drive, how far over the speed limit you go, how quickly you accelerate, and how aggressive your turns are, as noted by the Consumer Federation of America.
While telematics-based discounts can be substantial, they can also lead to higher premiums. A July 2025 report from the Maryland Insurance Administration found that 31% of drivers saw their premiums decrease with telematics, 24% saw increases, and 45% saw no change.
Potential Savings
Drivers can earn discounts of 10% to 40% through clean driving records or telematics data, experts say. Some insurers offer a 5% to 10% discount just for signing up for telematics, Afilalo said. However, customers rarely save more than 20%. "Companies advertise discounts as high as 25 to 40 percent, but anecdotally at least, we rarely see customers earn more than 15 to 20 percent off at renewal," she added. Telematics discounts are typically recalculated at policy renewal. Some insurers only offer discounts for good driving without penalizing bad driving, but this is not always the case, as the Maryland study showed. "Other insurers can actually raise your premiums for risky driving," Afilalo warned. "So, it's important to read the fine print and decide what you're comfortable with."
