Gadget helps Progressive offer insurance discount

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With Progressive's Snapshot mileage-based tracking device, not just how many miles you drive but also how you're driving them could affect your insurance rate.
Progressive is the latest automotive insurance provider to promote a voluntary program that lets agencies offer discounted premiums based on mileage. The company recently began promoting the campaign nationally on television, and Snapshot is available in 30 states. The program uses a device that drivers plug into their cars to monitor the time of day that they're driving, the distance they travel, and how hard they're braking. Data is transmitted to Progressive using the Snapshot's internal wireless modem. The best drivers who also rarely get behind the wheel can save up to 30 percent in this opt-in program. But is Snapshot's gentle braking monitoring a form of technology feature creep?
Drivers plug Snapshot into a vehicle's diagnostics port under the steering wheel column. The device doesn't use GPS to track where the drivers go, but it logs how far they drive and when they're driving. After 30 days, Progressive gives incremental discounts to customers who travel less than the average driver in their state (the national average is 12,000 miles). After six months, the driver returns the device and Progressive will lock in a rate that reflects that driver's overall risk profile. But the profile goes beyond mileage, and uses information such as the times of day participants travel and how often they slam on brakes to set the discounted rate.
Other insurance companies use less technically invasive ways to offer mileage-based discounts. State Farm subscribers self-report mileage, and GMAC uses OnStar vehicle diagnostics reports. However, Progressive bundles its mileage premium with time-of-day-based driving and braking habits. Allstate's Drive Wise goes one step further and uses a similar device to track mileage, braking, and speeds over 80 mph, but only in Illinois.
The idea of insurance companies monitoring driving habits sounds intrusive, but because Progressive's optional Snapshot is only used to determine eligibility for discounts and not to set or increase rates, it complies with insurance regulations. But these new developments show that insurance companies are looking to technology for more driver data and as a way to provide incentives rather than penalties to encourage safe driving. At the 2011 Mobile World Congress, Accenture, Vodafone, and Qualcomm promoted their partnerships with European automotive insurance groups that are using GPS technology and embedded telematics to track--and bill accordingly--driving behaviors. That level of monitoring hasn't yet made it stateside, but it's probably coming. And it raises the question, how much privacy are drivers willing to trade for cheaper auto insurance?


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