State Farm uses telematics to help drivers obtain better car insurance rates

State Farm Car InsuranceState Farm has announced that it has partnered with Hughes Telematics Inc. in order to give its car insurance customers the opportunity to use an in-vehicle device so that they may lower their auto insurance rates.

State Farm is calling the program In-Drive, and uses technology developed by the Atlanta-based telematics company to give its Illinois policy holders a chance to take part in the program starting in September. Other states may also be offered this program in 2012. The features of the technology are comparable to some of those offered by the popular OnStar service.

This concept is not entirely new for State Farm, as it has a five-state partnership with OnStar, including one in Illinois, which offers a performance and mileage-based program for discounted rates called “Drive Safe & Save”. The difference is that with the new In-Drive program, OnStar devices and subscriptions will not be necessary to participate, as has been the case until now. The exception is in California, where policy holders may opt to report their mileage themselves.

The rate discounts are obtained after good driving habits and low mileage are reported to State Farm from OnStar, which collects the data from the individual vehicles.

The new In-Drive program with Hughes Telematics expands this savings opportunity to State Farm customers without OnStar. Those customers will be provided with a small device (about the size of a typical mobile phone) which connects to the diagnostic port of the vehicle being insured (usually found beneath the steering wheel). It is compatible with the majority of vehicles made after 1995. The device is able to collect a number of different kinds of diagnostic and safety data and has some tracking abilities.

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