Most drivers with a squeaky clean track record are paying too much for car insurance. Insurance companies have traditionally assessed rates based on statistical information such as your vehicle, gender, race, age, and place of residence as opposed to actual driver behavior. A new option is now available as Progressive and others have launched pay as you drive insurance programs. Find out if this program is right for you.
The pay as you drive model
The model is generally exactly as it sounds; a device that tracks a driver’s usage to determine if they are eligible for a lower insurance rate or as low as 30% off. The insurance providers track the number of miles driven (albeit, not the most important factor), when the car is driven, frequency of hard breaks and sometimes vehicle speed. Some insurance providers claim they do not track the vehicle’s speed or where the car is driven but others do because GPS technology is being used in some cases.
How does Progressive’s Snapshot work?
The Snapshot, which is offered in almost 40 states (excludes California), is a small device that is inserted in the diagnostic port of the vehicle which every car has unless the car was manufactured in 1996 or earlier. The device extracts data such as the time, mileage, and how often the driver makes sudden stops. For 30 days, the device will track the data which means it is probably not a good idea to try it during the winter months if you live in a cold climate state. On the 31st day, Progressive may reduce your auto insurance rate up to 30%, if your driving behavior warrants it. After 6 months, the driver sends the tool back to Progressive for a potential permanent discount.
In case you’re worried, Progressive claims that auto insurance rates will never increase from participating in the program. They also provide you with specific suggestions to increase your chances of reducing your auto insurance rate. For instance, while enrolled in the program, they recommend driving fewer miles than the average driver in your state, minimize driving between midnight and 4 a.m., and try to brake gently.
What are the drawbacks of the pay as you drive model?
Privacy is probably the main reason that more drivers don’t enroll in the program. Specifically, the idea of being tracked in any fashion scares some drivers away. But, Progressive claims that the program is designed to focus on how safely, how often, and how far you drive as opposed to where you drive or how fast you are driving. This specific device does not contain GPS technology.
Also, just because they are offering up to a 30% reduced rate, that doesn’t necessarily mean you’ll get it or that it is even cheaper than competitor pricing. It is best to shop around before enrolling in the program. Other providers that offer similar programs include Allstate, State Farm and GMAC Auto.
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