A 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?