Usage-Based Auto Insurance Carolinas Telematics, NC vs SC

Opening answer (BLUF)

Usage-based auto insurance in the Carolinas, and the telematics tools that power it, let a carrier price part of the premium from how a household actually uses a vehicle, not only from age, garage ZIP, and the motor vehicle record. The National Association of Insurance Commissioners describes usage-based insurance as coverage that tracks mileage and driving behaviors through a plug-in device, a connected-car system, or a phone app, then aligns the rate more closely with those scored trips [1]. That setup can help careful, lower-mileage drivers. It can also collect location and phone-use data, and the rules in North Carolina are not identical to the rules in South Carolina.

How usage-based programs typically work

Telematics is the technology. Usage-based insurance is the product that uses it. The NAIC notes that programs can run on on-board diagnostics (OBD) dongles, connected boxes, built-in vehicle hubs, or mobile applications, and that the insurer then assesses the data and charges premiums accordingly [1]. A driver who logs long distances at high speeds is treated as a different risk than a driver who logs short distances at slower speeds [1].

The Insurance Information Institute (III) notes that participation in a telematics program is voluntary [3]. Traditional auto policies already ask households to estimate annual mileage. Telematics replaces that estimate with a continuous read of miles, braking, acceleration, and related trip data, which the III says helps carriers gauge risk more accurately at issue and at renewal [3].

South Carolina's Department of Insurance describes the same hardware mix on a current consumer page: driving data is typically captured by a mobile app, a small device supplied by the insurer (generally for vehicles produced after 1996), or, in some cases, directly through the vehicle manufacturer [4]. That is the same plug-in-or-phone-app choice Carolina households see on quotes. Each carrier files its own rating plan, and the weight given to mileage versus hard braking versus night driving can differ from one filing to the next.

The NAIC lists several product shapes under the usage-based umbrella: pay-as-you-drive, pay-how-you-drive, pay-as-you-go, and distance-based insurance [1]. Mileage-based plans lean on how far the vehicle travels. Behavior-based plans lean on how those miles are driven. Many retail programs mix both. Traditional rating factors do not disappear. Driving record, credit-based insurance score, vehicle type, garage location, prior claims, limits, and deductibles still form the backbone of a conventional auto premium [1]. Usage-based scoring is an extra rating factor on top of that file, not a replacement for it [2].

Scoring factors that usually move the premium

Devices and apps commonly measure miles driven, time of day, where the vehicle is driven (GPS), rapid acceleration, hard braking, hard cornering, cell-phone use, and air-bag deployment [1][2]. The NAIC notes that the level of data collected generally reflects the technology in use and the policyholder's willingness to share personal data [1]. An OBD dongle reads the car. A phone app also reads the phone: motion, screen interaction, and location permissions. If the phone rides in a passenger's pocket, or if a roommate borrows the car, the score can attach to the wrong person unless the program has a way to tag the driver.

Phone use while the vehicle is moving is not a gimmick factor. The National Highway Traffic Safety Administration reported that 3,275 people were killed in United States motor vehicle traffic crashes involving distracted drivers in 2023, and that 8 percent of fatal crashes that year were reported as distraction-affected [13]. North Carolina's insurance commissioner, writing in April 2026, called distracted driving the leading factor putting upward pressure on automobile premiums and cited that same 2023 NHTSA fatality count [15]. South Carolina's Department of Insurance likewise ties distracted driving to crash risk and premium pressure, and it points households toward telematics as one way to collect driving-habit data, receive feedback, and, where a carrier offers it, earn safe-driving rewards or discounts [4].

Time of day and mileage show up almost as often as braking. A Consumer Reports article updated in August 2025 quotes III spokesperson Scott Holeman as saying the largest discounts tend to go to low-mileage drivers who avoid rush-hour traffic and night driving, practices carriers treat as riskier [14]. That is a tendency, not a promise. Consumer Reports' 2024 survey of 40,566 United States policyholders found a median annual savings of $120 among telematics users [14]. Households with younger drivers on the policy saw a higher median ($245) [14]. Only 28 percent of those surveyed even knew the current carrier offered a driver-monitoring program, and only 14 percent had used telematics with that carrier [14]. Advertised maximum percentages are a marketing ceiling. Actual credits are usually smaller and depend on the scored trips.

A 2022 Insurance Research Council study summarized by the III found that 45 percent of drivers surveyed said they made significant safety-related changes after joining a telematics program, and an additional 35 percent reported small changes [3]. Feedback after a hard-brake alert can improve the next trip. It can also be noisy if the algorithm tags a safe stop as a risky event.

North Carolina: the Safe Driver Incentive Plan still prices the record

North Carolina does not replace its statewide Safe Driver Incentive Plan (SDIP) with a telematics score. SDIP is the statutory point system for convictions and at-fault accidents. One SDIP point, for example a moving violation or a small at-fault property-damage accident, currently carries a 40 percent rate increase on the live NCDOI consumer page [8]. For many events the experience period is still three years. For certain convictions that draw four or more SDIP points on or after July 1, 2025, that window stretches to five years [8][9].

Telematics sits beside that system, not inside it. In July 2024, NCDOI spokesperson Jason Tyson told WRAL, "We do not allow insurance companies to surcharge NC drivers based on telematics programs" [10]. A North Carolina usage-based program is supposed to work as a discount tool, not as a second points plan. WRAL also reported that driving data may influence a North Carolina rate only with the policyholder's explicit permission, and that several statistical organizations are approved in the state to handle telematics [10].

NCDOI's consumer auto pages explain required coverage and rating changes. They do not host a dedicated telematics explainer of the kind South Carolina published. Liability coverage is required in North Carolina, along with uninsured motorist coverage [7]. For policies new or renewed on or after July 1, 2025, the state's minimum liability limits rose to $50,000 per person and $100,000 per accident for bodily injury and $50,000 for property damage, and underinsured motorist coverage is included on those policies [9]. A telematics credit does not change those floors.

South Carolina: consumer pages describe the tools, not a surcharge ban

South Carolina is a tort state. The Department of Insurance's automobile consumer page states that auto liability policies contain bodily injury liability, property damage liability, and uninsured and underinsured motorists coverage under South Carolina tort law. The state requires a minimum of $25,000 per person and $50,000 per accident for bodily injury, $25,000 for property damage, and uninsured motorists coverage equal to those minimums (25/50/25) [5]. Underinsured motorists coverage must be offered; it is not required to be purchased [5].

On telematics, SCDOI is not silent. The department's current distracted-driving consumer page explains that telematics collects information about driving habits, that insurers may use that data to offer personalized driving feedback and safe-driving rewards or discounts, and that telematics may also support mileage-based (pay-per-mile) policies [4].

SCDOI also posted a consumer bulletin, "Understanding Usage Based Insurance," dated April 2017. That older bulletin still sits on the department site. It lists the same scoring inputs (miles, time of day, location, rapid acceleration, hard braking, hard cornering, air-bag deployment) and states that premiums may go up or down depending on driving behavior [6]. We did not find a current SCDOI page that matches North Carolina's 2024 no-surcharge statement. Until a household has that answer in writing from the carrier, assume South Carolina rules are not North Carolina rules. Do not import the NCDOI surcharge limit across the state line.

Questions to ask before enrolling

The NAIC's 2021 consumer insight, still the association's public explainer, tells shoppers to evaluate driving habits honestly, to know exactly what data is collected, and to understand that not every driver is "better than average" on the factors a program scores [2]. Pair that with the SCDOI list:

1. Device, app, or built-in car system? An OBD plug-in reads the vehicle. A phone app reads the phone. A connected-car feed may already be on from the manufacturer. Ask which one the quote uses.

1. What, exactly, is scored? Miles, hard braking, rapid acceleration, hard cornering, time of day, GPS location, and phone motion are the usual set [1][2]. Ask for the list in writing, including whether night driving or rush-hour miles are penalized even when the rest of the trip is smooth.

1. Can the premium only fall, or can it rise? In North Carolina, NCDOI has said carriers may not surcharge based on telematics [10]. In South Carolina, the 2017 consumer bulletin said premiums may go up or down [6]. Get the current rule for the specific program, in the specific state, before anyone taps "agree."

1. Who is behind the wheel? If several licensed operators share a vehicle, ask how the program assigns a trip. A phone left in a cup holder can score a spouse, a parent, or a roommate.

1. How long does monitoring last? Some programs sample for a trial window (often about 90 days) and then lock a credit. Some monitor continuously and reset at renewal.

1. Will the data be used after a crash? SCDOI told consumers to ask whether the insurer will allow a choice about using telematics data to settle a claim [6]. Ask that in both states.

1. What happens if the household leaves? Confirm whether the credit disappears at once and whether the base policy can stay in force without the app.

1. Who else receives the file? Ask whether the carrier, a telematics vendor, a statistical organization, or a consumer reporting agency will store location or behavior data, for how long, and for what purpose beyond rating.

Data collection, consent, and connected vehicles

Tracking mileage and behavior has raised privacy concerns. The NAIC notes that some states have enacted legislation requiring disclosure of tracking practices and limiting the data collected [1]. The III makes the same point: some states require disclosure of tracking practices and devices, and some insurers limit what they collect [3]. That is consumer language, not a scare line. Read the enrollment screen the way a person would read a deductible page.

Connected cars add a second path that is easy to confuse with a voluntary usage-based program. In a May 2024 technology post, Federal Trade Commission staff wrote that connected cars can collect a lot of data about people, including sensitive information such as biometric data or location, and that collection, use, and disclosure of that data can threaten consumers' privacy and financial welfare [12].

In January 2026 the FTC finalized an order with General Motors and OnStar settling allegations that they collected, used, and sold consumers' precise geolocation data and driving-behavior data from millions of vehicles without adequately notifying consumers and obtaining affirmative consent [11]. The order imposes a five-year ban on GM disclosing that data to consumer reporting agencies and requires affirmative express consent before collecting, using, or sharing connected-vehicle data, with limited exceptions such as sharing location with emergency first responders [11].

A voluntary usage-based auto insurance program, with a known app or plug-in, is one data relationship. A manufacturer connected-car feature is a separate path. Confirm both. If a new vehicle already sends trip data to a manufacturer portal, ask whether that feed can reach an insurer or a consumer reporting agency even when nobody enrolled in a discount program. Consent should be express, not buried.

How an independent agency shops these options

Our team is an independent Trusted Choice agency licensed in South Carolina and North Carolina. We shop many carriers rather than steering every household to one brand. No single company is "best" at usage-based auto insurance in the Carolinas. Telematics filings differ on hardware, on whether a credit can later reverse, and on how night driving and phone motion are weighted.

The right sequence is still the auto policy first. Limits, deductibles, medical payments, uninsured and underinsured motorists, and the SDIP or claims record do more for most households than a monitoring credit. Our auto coverage page is the place to start that review. Only after the contract is sound do we compare voluntary telematics options: enrollment credit versus earned credit, trial window versus continuous scoring, app versus plug-in, and the written answer to "can this rate go up from the score?"

Low-mileage commuters, remote workers who barely use a second car, and some younger drivers on a family policy are the profiles that most often benefit, which matches what Consumer Reports and the III describe [14][3]. Night-shift workers, heavy highway commuters, and anyone who shares a phone-scored vehicle with several drivers should pause. Territory, garage address, and the two states' different minimum-limit and rating rules still sit under any telematics layer for drivers in the Grand Strand, Charleston, Charlotte, Horry County, and coastal Carolina [5][7][9].

Practical takeaways

• Usage-based auto insurance uses telematics (a plug-in, a phone app, or a connected-car feed) to score miles, braking, time of day, and similar trip data, then layers that score onto a traditional auto rate [1][2].
• Participation is voluntary. Ask what is measured, who is scored when several people share a vehicle, and how long monitoring lasts [3][2].
• North Carolina still prices convictions and at-fault accidents through SDIP. NCDOI has said carriers may not surcharge North Carolina drivers based on telematics programs [8][10].
• South Carolina's DOI describes telematics as a feedback and discount tool and, in a 2017 bulletin, noted that UBI premiums may go up or down. Treat the two states as separate legal files [4][6].
• Do not treat advertised maximum discounts as typical. A 2024 Consumer Reports survey found a $120 median annual savings among telematics users [14].
• Connected-car data is not the same as a voluntary discount program. The FTC has acted when geolocation and driving-behavior data were shared without adequate notice [11][12].
• Shop the auto contract first (limits, deductibles, medical payments, UM/UIM), then compare telematics options across carriers. No one company is the default winner.

How we can help

Our team compares usage-based and traditional auto options for households across South Carolina and North Carolina, with an eye on the scored trips, the consent terms, and the coverage that still has to sit under any discount. Call (843) 626-9244. Have more questions or want to get in touch? Contact the agency

Citations

1. National Association of Insurance Commissioners, "Telematics" (2026-09-01)
2. National Association of Insurance Commissioners, "Understanding Usage-Based Insurance" (2021-09-08)
3. Insurance Information Institute, "Background on: Pay-as-you drive auto insurance (telematics)" (2026-07-01)
4. South Carolina Department of Insurance, "The Costs of Distracted Driving" (live 2026)
5. South Carolina Department of Insurance, "Automobile Insurance" (live 2026)
6. South Carolina Department of Insurance, "Understanding Usage Based Insurance" (2017-04)
7. North Carolina Department of Insurance, "Auto and Vehicle Insurance" (live 2026)
8. North Carolina Department of Insurance, "Safe Driver Incentive Plan" (live 2026)
9. North Carolina Department of Insurance, "Changes to the Rating of Automobile Insurance Policies, Effective July 1, 2025" (2025-07-01)
10. WRAL, quoting NCDOI, "Apps are tracking driving: what to know about car insurance rates" (2024-07-31)
11. Federal Trade Commission, "FTC Finalizes Order Settling Allegations that GM and OnStar Collected and Sold Geolocation Data Without Consumers' Informed Consent" (2026-01-14)
12. Federal Trade Commission, "Cars & Consumer Data: On Unlawful Collection & Use" (2024-05-14)
13. National Highway Traffic Safety Administration, "Distracted Driving in 2023" (2025-04)
14. Consumer Reports, "Usage-Based Car Insurance Can Save Money, but It Puts Data Privacy at Risk" (2025-08-21)
15. North Carolina Department of Insurance, "Avoid distracted driving; focus on the road ahead" (2026-04-01)