This is something that has come about in the last several years and is saving people a lot of money! What it does, is it monitors the driving of insureds based off of the hours you drive and the amount and braking and speeding for a period of time. Most companies monitor it for 60-90 days. A lot of people get concerned thinking the insurance company is getting too personal with them, but the more you know about the more comfortable you feel with it.
I have seen lots of people save up to 20% on their insurance policies just by doing this. As long as people are not speeding at high speeds or not driving late at night between the hours of 12:00 am - 4:00 am, then you can definitely see a savings in your premium. Companies also let the insured monitor their driving as they go along with the program so you can see how you are doing. If you are not happy with it, you can always opt out. I definitely recommend asking your agent about this discount to see if it can help you save.
Additional Resources (Note: Dorsey Insurance is not responsible for the content of external sites.)
Auto insurance discounts and monitoring
How Do Those Car Insurance Tracking Devices Work?
Low Mileage and Usage Based Discounts