What Is the State Farm Drive Safe and Save and Is It Right for You?

If you have State Farm Insurance, or even if you don’t, you may have heard about their new Drive Safe and Save policy.

Drive Safe and Save is a promotion on car insurance that is based on your mileage as well as driving performance. Just enrolling in the program gives you a discount of five percent on your car insurance. The specific details of the policy depends on each individual driver, but generally, State Farm discounts your insurance rate for good driving. The program is meant to promote safe driving practices, which is a double win: less accidents for you and fewer expenses for insurance to cover.  You can get a discount of up to thirty percent depending on how good your driving is. 

So the main question now is, how are these discounts calculated? 

Drive Safe & Save collects the actual miles you have driven and also documents basic driving characteristics on the Drive Safe and Save mobile app, which are used together to calculate the discount. The app runs its algorithm every six months to then calculate the discount.

According to this policy, drivers are given a bluetooth beacon to monitor their driving. After the first six months of signing up for this program, drivers receive a report card with grades for different driving habits such as turning, time of day, and hard brakes. Depending on your grades, you are given a projected discount and can work on improving your driving to increase your grades and your discount. Current users have also shared that there is a lot of importance put on your mileage when calculating as well. 

How Does It Work

For the Safe and Save program, a bluetooth beacon has to be connected to the vehicle. The device can also interact with smartphone mobile programs such as Apple Carplay. The only constraint is that the car must have a working odometer. Once attached the vehicle, the beacon is paired with an app on your phone, which must have working location/GPS, camera, and Bluetooth features in order to be compatible. The app and beacon together collect your driving data when you are in your car and trips are recorded automatically. You are however required to submit a photo of your odometer and input your odometer reading manually after each monthly segment. After six months, State Farm sends you a report card.

How Grades are Determined 

For the Drive Safe and Save program, the factors considered in the grading are annual mileage, acceleration, braking, turning, speed, and time of day. For annual mileage, the less you drive leads to greater savings. The more time you are driving, the more likely you are to get in an accident. Thus, State Farm encourages less frequent driving to decrease the risk of accident. For acceleration, faster acceleration makes cars more difficult to control, which can also lead to accidents. Braking quickly is a sign that you may have been driving too fast or too closely to another vehicle, which is also not a safe practice. Fast turns indicate that you might have not given yourself enough time to turn or slowed down enough, which is also unsafe. Faster speeds can lead to more intense accidents. Finally, certain times of day are more dangerous. For example late at night is more dangerous since drivers may not be on their best behavior due to fatigue or there might be a lot of traffic. Based on whether or not a driver engages in these behaviors and to what degree determines the grade--and ultimately discount--he or she will receive from State Farm. 

Other Similar Programs

State Farm isn’t the only company to offer a reward program to promote good driving behavior. Other insurance companies also have programs which give insurance discounts for good driving habits. For example, Allstate also has a similar program called Drivewise. The program provides an initial three percent discount. Unlike the Drive Safe and Save program, Drivewise does not provide additional discounts. Instead, you can earn cash back through safe driving. The cash back policy kicks in after the first fifty rides and then every six months. Drivewise is a little more direct with providing customers with its criteria for safe driving: driving below 80 mph, limiting driving during late hours, and limiting hard brakes. This criteria is then used to calculate what it calls a “performance reward.”

Activating Drivewise simply requires downloading the app and inputting your account details. The app also displays your last one hundred trips, your most recent parking location, and your rewards. 

Another similar program to State Farm’s Drive Safe and Save is Progressive’s Snapshot. Snapshot calculates a discount based on your driving performance during a six month interval. The app also shows your past trips and highlights sections where you exhibited bad driving behavior such as checking your phone, making a hard brake, or accelerating very quickly. 

Safeco and Nationwide also offer similar programs as part of their insurance policies.

Comparison of different insurance reward policies 

The Good and The Bad

One issue with these programs is that you cannot use or test the app until after committing to a policy. Therefore, you don’t know how sensitive the algorithms are and whether your driving ability is “good” until after signing up and using the app. 

Some users have also criticized how certain bad driving habits may be taken advantage of to reduce your discount. For example, with Snapshot, one of the bad driving habits for these programs include driving at a risky time of day, such as in the evening or early morning, but the times in these intervals are usually the times the average person has to go to work. If you work from 9:00 to 5:00, depending on your commute and program, you may always be driving during a “bad” time, but this is unavoidable. That is what reddit user Bread-n-Butterflies experienced with Snapshot:

I wasn't aware when I got it that they count the time of day against you. Because I work 9-5, I am driving twice a day in "bad" time zones. I have 0-2 "hard stops" on any given day, almost always someone trying to merge last second, too close in front of me or stopping short (not that the device is capable of attributing fault).

Many users feel cheated because insurance companies do not reveal the specific factors that go into your grade’s calculation. Other users criticized that it is difficult to change grades even after improving driving ability, which depends again on how sensitive the device and the program are.

Factors to Consider Before Joining A Similar Program

Just as how your work life inadvertently affects how good your driving is classified, your geographical location can also affect this. Some factors considered by this discount algorithm are hard brakes and fast turns. Thus, if you drive in a city environment, these kinds of hard brakes and fast turns are unavoidable. Therefore, the program may be biased against inhabitants of cities. On the other hand, if you mostly drive in suburban or rural environments, this kind of program may be more beneficial and helpful for you.

Is it worth it?

Although these programs advertise savings up to thirty percent, in reality, the savings are usually between five and ten percent and in specific environments. Users report the biggest savings with people who drive the least and in rural settings. So, if you drive frequently and in a congested city, it is possible that these insurance programs could actually do more harm than good to your wallet. Indeed, if the app determines that you drive “poorly,” you premium will go up. So, the use of these reward apps is recommended on a case by case basis. Regardless though, programs like State Farm’s Drive Safe and Save offer an exciting future where AI can be used to benefit drivers. 

Taking reward-based driving one step further 

Using AI and Behavioral Economics to promote positive driving behavior has many other exciting applications, specifically for the trucking industry. 

SafeMode is a fleet mobility company which is working on an incentive based system to change driver behavior to become safer. The app provides feedback to its users to notify them on what they are doing wrong and how to improve, while rewarding good behavior. The app also creates profiles of the different drivers to eventually create a database of driver activity. This can be used to help drivers and autonomous vehicles predict events rather than just react to the negative events occurring. Learn more about SafeMode here.