The experience was very good
Reinaldo G
Dunnellon, FL
By Liz Farmer
Maryland is one of the first Eastern states selected by Progressive to offer a new car insurance program that may lower your rates -- and your privacy.
The program, called MyRate, determines a driver's insurance rate based on readings from a device installed in the insured car that monitors how it's driven. The program will be available to Maryland drivers Sept. 26.
"It's really a whole different way to go about auto insurance," said Richard Hutchinson, Ohio-based Progressive's general manager for the program. But, he cautioned, "This type of program is not for everybody."
The device, which only works in vehicles manufactured during or after 1996, attaches underneath the car's steering column and connects to the internal computer. From there it is programmed to track a "driver's story," including abrupt starts and stops, speed and even time of day.
Ralph S. Tyler, Maryland Insurance Administration commissioner, said he was initially concerned about consumer protection and privacy issues surrounding the device and what disclosures would be made to the insured.
"Our central concern in all our dealings is, number one, to make sure that consumers have a choice and number two, they know what they're buying and -- if they choose to buy it -- they do so with full knowledge," he said.
Tyler said his administration reviewed Progressive's marketing materials and was satisfied the company fully disclosed how the program worked.
Hutchinson said typically the program is attractive to only a certain percentage of drivers comfortable with having an outside party monitor their driving habits. In states where a similar program by Progressive has been offered for several years, only about one out of three eligible drivers opt in.
"The ones who do the best in this are ones that drive less miles than the average driver, tend to be steadier with less braking and accelerating than others, and those who don't go out after midnight," Hutchinson said.
He also said Progressives opted not to add a GPS system to the device to allay consumer concerns that their whereabouts would be known at all times by their insurance company.
"We're trying to give consumers who want this program ... a way they can do that and not feel like they're giving up their privacy altogether," he said.
The program, which Hutchinson said cost millions in research and development in the 1990s, debuted as a pilot program called TripSense in Minnesota in 2001 and was adopted in 2004 in Oregon and Michigan. The revamped program, now called MyRate, is now being rolled out countrywide this year. In addition to Maryland, New Jersey, Louisiana and Alabama have adopted the program and Hutchinson said Progressive expects to add two more states by the end of the year.
The cost to have the device installed is $5 a month and new customers can earn a first-term discount of up to 10 percent off their insurance. Maryland is a "deduction only" state, meaning a driver's quoted insurance payment cannot increase due to erratic behavior.
Based on a car's performance, which customers can follow online with their Progressive accounts, a driver's insurance discount can increase 25 percent or more based on their driving habits. Drivers can also compare their performance to national averages to see how they measure up.
"This is a program for those who believe that their driving behavior, driving story and driving habits give them a chance to earn a discount they otherwise would not be able to get," Hutchinson said.
Originally published by Liz Farmer.
(c) 2008 The Daily Record (Baltimore). Provided by ProQuest LLC. All rights Reserved.
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