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Progressive allows Snapshot test-drives

Des Toups

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CarInsurance.com

SpeedometerNow 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.”)

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