Now you don't have to switch car insurance companies to find out
if Progressive's "Snapshot" program would save you money.
"Snapshot" and other usage-based plans like it use a device to
measure actual driver behavior such as miles driven, time of day
and braking. All promise substantial savings -- up to 30 percent in
Progressive's case -- but until now required drivers to switch
first and save later.
Progressive on Monday said it would offer its plug-in device to
customers of other insurance companies, who can use it for 30 days
and receive a quote based on their own driving behavior.
In the absence of such specific data, drivers without major
dings on their records usually pay rates that reflect an insurance
company's experience with their ZIP code, age bracket or model of
car. That often means safe drivers in riskier areas pay a lot for
coverage. (For example, a 40-year-old with a clean record
in Detroit ZIP code 48227
would pay more than $4,000 a year to insure a 2012 Honda
Accord.)
"For most, the rates they're paying are higher than the risk
they actually present -- and in many cases, much higher," said
Glenn Renwick, Progressive's president and CEO.
Slow and steady wins the discount
For some drivers, these usage-based plans make a lot of sense,
and they are one of only a few ways to make a noticeable impact on
your car insurance bill (See "
The 3 biggest ways to save on car insurance
.")
Maximum savings are hard to come by, though. Your definition of
a "hard braking event" may involve tire smoke and a moment of
prayer, but the insurance company's might not. (See "
Progressive's Snapshot: What's the catch?
") You can't drive a lot -- to an insurance company, every mile you
drive represents risk. And you can't work the graveyard shift; a
lot more claims occur at 3 a.m. than at 3 p.m.
Progressive says about 70 percent of those who try
Snapshot
wind up with a discount between 1 percent and 30 percent; the
average customer saves about $170 a year. Enrollees can log into
Progressive's website to see updates on how they are doing.
Many major auto insurance carriers now have some form of
usage-based coverage. Some, like Snapshot, work solely through the
car's onboard diagnostics system. Others, like State Farm's
In-Drive, add mileage reporting through communications features
such as General Motors' OnStar and Ford's Sync.
All say the data cannot be used to penalize a driver, only to
discount the rate. If you're one of the very cautious drivers who
stand to benefit most, Progressive's new offer is a low-risk way to
investigate potential savings.
All discounts come off of base insurance rates, though, which
means there is no replacement for shopping around. The differences
between insurance company rates may be greater than the discount
you're offered. CarInsurance.com's recent analysis found drivers
under age 25 were typically offered rates that differed by more
than $1,100 a year. (See "Pocket $1,102 just by shopping
around.")