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Would You Put A Tracker In Your Car To Save On Auto Insurance?

By Kira Botkin

Traffic jamA new type of discount in auto insurance is being offered to customers of Progressive. It’s known as a Snapshot device, which is plugged into your car’s computer and provides real-time data on your speed, braking, and miles driven. This allows the company to estimate your driving habits more closely and can give you a discount of up to 30% – that is, assuming Snapshot shows that you’re a good driver. There is a similar system called Onboard Advisor available through Liberty Mutual, but it seems to be limited to commercial auto fleets for the moment.

The reports compiled are pretty specific – they know exactly how many miles you drove, at what time of day, and how many times you did a “hard brake” on each day. It doesn’t know where you’re driving, but it does know how fast. This allows them to give a more personalized guess at how risky of a driver you are. Of course, one would assume that people who know they’re bad drivers won’t go for this. You use the device for six months, with a review at three and six months to determine if your policy premium should go down. If Snapshot shows you’ve been a better driver than average, and are thus less likely to get in an accident, it will calculate a discount specifically for you, and your discount will apply when you renew your insurance. If Snapshot shows you’re not the world’s greatest driver, you’ll simply pay the premium you were quoted before you installed the system.

What do you think? I’m not sure I’d sign up for this. I’m all for saving money on car insurance, but I feel like I can get a good rate simply because of the fact that I’ve never been in an accident or even gotten a speeding ticket. If I had had a few accidents but was otherwise a good driver, I might be more inclined. And it’s also true that people who don’t drive very much do pay higher amounts per mile, even though most insurers ask you about your driving habits, so this would be a good way to get a discount by actually proving that you’re on the road less.

Although the system doesn’t have GPS and thus doesn’t actually know where you are, it’s still a little unnerving that the machine is essentially tattling on you. It records how fast you’re going, which would not be good news for many of us. I kind of wonder whether this will reveal surprising information about all those other wackos on the road who go faster than I am. (Kidding. No one is going faster than I am.) And I’m not sure what happens if the machine doesn’t function properly and tells the insurance company that you’ve been hard braking six times a day – would they believe you over the machine? And while Progressive says that you can opt out at any time and your Snapshot data won’t be used to determine your rate, I find it hard to believe that they would still offer you a comparable renewal rate if they found out that you’re a high risk driver, for example driving only at the riskiest times of day. Plus, the pooled information from thousands of drivers will provide better localized information – if your neighbors are bad drivers, your insurance might go up anyway.

What do you think – is up to 30% off your car insurance worth reporting your driving habits to your insurance company? Would you do this if your car insurance company offered it?

(photo credit: Hamed Saber)

Kira Botkin
Kira is a longtime blogger and serial entrepreneur who enjoys gardening, garage sales, and finding stray animals. She lives in Columbus, Ohio, where football is a distinct season, and by day runs a research study for people with multiple sclerosis. She hopes that the MoneyCrashers team can help you achieve your goals and live a great life.

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Comments

  • http://www.moneybright.co.uk Andrea

    Honesty, it depends how much I would save.

    It does sound like a potentially great idea. I don’t think there are any providers doing that in the UK yet, but I will certainly watch out for it!

  • Justine

    I think for those folks like myself who commute during rush hour in the state of California may not be so inclined even if they are an excellent driver. I personally have never been in an accident (thank god, knock on wood, etc) but I do have two speeding tickets that are no longer on my record from when I was young and foolish. Luckily for me in this state speeding tickets only stay on your record for three years. My concern over this idea is that while driving into work I have to hard brake a number of times to avoid folks who feel it not necessary to check over their shoulder to see if anyone is in the lane they are so brazenly trying to get into. This being said; I feel my rates could potentially go up (I’m not quite sure if that is how it works though). I have to pay roughly $79 a month with an excellent insurance company (USAA), so while this may be useful for some it could be a detriment to myself. Thank you for the well worded article for I was unaware something like this existed!

  • Jesse Michelsen

    I’d be all for it! I pride myself on driving close to the speed limit, breaking very softly and accelerating much slower than the cars behind me want me to :) I hope my insurer gets on board with this, I’d be signed up before you could say, “That’s Allstate’s Stand…”

  • Sam Jones

    I just signed up for this and wanted to let you know that per Progressive, it will NOT be collecting data about how fast you are going. Per their website …”Your driving snapshot includes the number of miles you drive, time of day you drive and how often you make sudden stops.”

    Should be interesting or maybe I’ll change my mind within the 14 days and no harm/no foul.

    • http://profile.yahoo.com/LXQKTUE7DXJSASXCXDRWXTEQVM Melina M

      I just signed up for the snapshot program and it is scary how precise it is. It monitors how long you were driving, the exact time of day (risky times are between 12 and 4am) but they consider moderate times (4am-9am, 3pm-6pm, and 9pm to 12am) hard brakes, and the speed (it gives you a speed chart for every trip so you can see). They say they don’t use the speed to determine your rate (I don’t speed anyway so it won’t matter for me) but I would think they might use it to increase your premium the next 6 months (You couldn’t really prove that they did it because you were a high risk driver could you?) We will see how it pans out, I really hope to save 30%!!

  • Lstutts60

    I would like to try a “Snapshot device”, but I wonder if would still get the state increase that I getting on my renewal with 21 Century?

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