What is disclosed is a system and method for preventing texting while driving and offering usage-based rewards. The system comprises a phone holder mounted within a vehicle and an application running on the driver's smartphone. A control circuit of the phone holder is configured to detect the smartphone in the holder, detect vehicle motion. An NFC tag on the holder also launches the smartphone application. Depending on measured parameters and determinations made by the “smart” holder and smartphone application, usage data is recorded by the control circuit and/or smartphone. The in-vehicle system is also configured to connect to a cloud-based server for storing vehicle and phone usage data and calculating usage-based rewards, such as insurance benefits for plan members. The system can also include an electronic notification device affixed to the rear windshield of the vehicle and that is selectively switched on to indicate active use of the system.