There has been a lot of attention paid recently to new auto insurance "discount" programs that are based on mileage driven and the safe driving practices of insured drivers.
One such program is Snapshot, provided by Progressive Auto Inusrance. Snapshot is a usage-based insurance program, that assesses a driver's habits regarding mileage driven and their safety. Progressive says that the discount is for up to 30 percent—on a driver's car insurance.
Here’s how our usage-based insurance program works:
First the client has to enroll online and sign up for Snapshot when they are quoted a price to buy a Progressive car insurance policy. The customer then receives via the mail a device to plug into their car. For the next 30 days, the customer keeps track of their good driving habits with the Snapshot device. The customer can log in to their Progressive policy anytime via the internet to see their projected Snapshot Discount.
Progressive says the discount can be for as much as 30%, but admits the average consumer is saving between 10 to 15 percent, according to an investigation by a Cleveland television station.
On day 31, Progressive determines the initial discount the customer will receive and that discount kicks in. After six months, the customer will send back the device, and then Progressive finalizes the driving snapshot, and the client can keep saving for as long as they’re insured by Progressive.
Important Snapshot Factors
Progressive tracks several key items related to an insured's driving habits to assess the amount of the discount including the time of day they drive, miles driven, and braking of the vehicle. Here are the specifics:
- Time of day: The reason Progressive tracks what time of day you is simple: if you drive during peak hours for accidents, such as between midnight and 4 a.m., the likelihood you’ll get in an accident is much higher than if you drive during off-peak hours. If the majority of your driving is during less accident-prone hours, you may see a larger discount.
- Miles driven: Many insurance companies ask drivers to supply this data, meaning that drivers track their own mileage and report that amount. Because Progressive tracks mileage digitally through the Snapshot device, the chance of an accident can be better predicted. The general idea is that the more miles you drive, the more likely you’ll get into an accident.
- Hard brakes: A hard brake is when the car’s speed decreases at a rate greater than 7 mph per second. More hard brakes per day may indicate less cautious driving. Progressive will give higher discounts to drivers with fewer hard brakes.
It's important to note that Progressive says that insureds can only save money with Snapshot—their premiums won’t go up—but if at any point, the insureds decide the program isn’t right for them, they just need to call and then send back the device.
Progressive does not provide details on what the device costs or a line item on the customer's insurance bill for the administrative cost of using the device in tracking the driver's habits. While consumers don't know what this price is, Progressive's Public Relations team doesn't feel it's hidden because they don't want that information available to their competitors.
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