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Pay-as-you-drive goes national

By Jay MacDonald ·
Tuesday, April 5, 2011
Posted: 9 am ET

After kicking the tires for several years, Progressive has finally gone nationwide with its Snapshot pay-as-you-drive auto insurance program, offering discounts of up to 30 percent based on optional real-time analysis of your driving habits.

You may have heard of Snapshot, a monitoring device that plugs into your vehicle's onboard diagnostics port and wirelessly feeds driving data, including miles, time of day and braking behaviors, back to the Progressive mothership. You ride with it for a month, then check online to see how much your driving habits are worth in risk-avoidance dollars to the company.

According to Progressive, drivers currently riding with Snapshot save on average $150 per year.

CEO Glenn Renwick calls Snapshot "a game changer" that enables drivers to pay for auto insurance based on how they drive, not how others drive. There's also a green incentive: fewer miles driven means cleaner roadways and less carbon emissions.

Currently available in 32 states, Snapshot went national in mid-March with a splashy TV ad campaign.

Interestingly, insurance agents seem as divided as the rest of us about pay-as-you-drive, based on comments posted on an Insurance Journal story about Snapshot.

One agent welcomed Snapshot: "I cannot tell you how many times I heard people telling me that they barely drive and they think they should get a lower rate for it, and I completely agree. If you rarely drive, you have less of a chance of causing an accident than someone who is on the road constantly."

But another reader questioned the fewer miles-fewer accidents theory: "What you have not put in consideration is how many accidents actually happen close to home! Just because you drive less than 3,000 miles a year does not preclude you from having more accidents."

A third reader questioned the status of drivers who choose not to use the device: "Will they automatically be considered risky drivers and be perceived as those who don't want their risky habits seen? Will this drive up their rates eventually?"

A fourth reader questioned the possible slippery slope ahead: "As we give up more and more information about ourselves then our data defines us. Our personal freedom is curtailed for the pursuit of a lower rate. Suppose someone quits volunteering because it drives up their mileage (rates)? Are we better off?"

What's your take? Would you submit to monitoring by your auto insurance company in order to obtain better rates?

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April 05, 2011 at 4:41 pm

Saying that most accidents ocurr within 20 miles of home is a bit flawed. Most people do most of their driving within 20 miles of home anyways. To really see how distance to home would relate to an accident you would have to weight the distance from home that the accident ocurred by the frequency with which someone travels at that given distance from home