Progressive Snapshot insurance: What's the catch?

Willing to let your car insurance company ride shotgun for a chance at a discount? That's the idea behind Progressive's Snapshot program.

The gives drivers a discount if they share their driving information. The Snapshot app monitors time of day and vehicle speed, how many miles are driven and the frequency of hard braking. It also offers driving tips. 

Progressive said it's given drivers $700 million in discounts for using Snapshot. The average discount is $145, including $26 when you sign up, according to the company. 

The idea is simple: Drive carefully and save. Drive less, save more. And if you avoid driving during peak accident hours (Progressive says that's between midnight and 4 a.m.), you save some more.

The device must be installed for at least 30 days, with the option to leave it in longer for a broader profile and perhaps a bigger discount. The company claims that as much as 30% is possible.

All companies offer a good driver discount; Snapshot is a good driver discount on steroids.

Consumer concerns about 'Snapshot'

Progressive says that the worst outcome from installing Snapshot would be failure to qualify for an additional car insurance discount.

However, some skeptics worry about how Progressive will use the data. They worry that rates may actually go up if they don't drive well or that their privacy could be compromised if the information is shared with others. Progressive says about 20% of drivers who use Snapshot see a rate increase connected to high-risk driving. 

Marc Rotenberg, executive director for the Electronic Privacy Information Center (EPIC), says his group has concerns whenever a company gathers customer information.

"We'd be concerned that (gathered information) could be shared with third parties" that could compromise the driver, Rothenberg says. Another privacy concern with such programs is that the information could be used in advertising targeted at consumers or shared with the police in driving-related investigations.

Some potential customers share the suspicion that blind pursuit of the cheapest car insurance could backfire.

Progressive says Snapshot won't increase your rates, don't share information with a third party unless it's required "to service your insurance policy, prevent fraud, perform research or comply with the law. We also won't use Snapshot data to resolve a claim unless you or the registered vehicle owner gives us permission."

Progressive can't track where you drive because the device doesn't include GPS technology. The worst that can happen is not qualifying for a discount, according to Progressive. 

A Snapshot snapshot

Those assurances were enough for William Parsons, who received an almost a 15% rate cut for participating in the program. "I didn't have any hassles," says Parsons, who lives in New York. "After a week or so I kind of forgot that it was in there."

Parsons says he was optimistic about the results because he fits the profile of a driver who would qualify for a premium cut. "I'm pretty anal when I drive. Slow and steady, 10k miles a year."

Parsons adds that he wasn't "overly concerned" about the company having a detailed report on him.

"If I was a bad driver, I'd probably feel different," Parsons says. "But I wouldn't sign up" if that was the case.

In fact, Progressive recommends that only careful customers who don't drive much, or at least avoid peak accident hours, should sign up.

Easy on the brakes

Although generally satisfied, Parsons says the brake monitoring seemed inconsistent.

"There were trips where I know I didn't brake hard but it showed that I did. (Other times) I think I did hit them a little hard, but I'm not sure if they registered. Not really a big deal, in the end" because he still got the discount.

Progressive, however, stands behind Snapshot, saying all monitoring information, including braking statistics, is accurate.