'Snapshot' car 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.

"This is a new approach to auto insurance. It allows you, the consumer, to share your driving to get a discount," says Richard Hutchinson, Progressive's general manager of usage-based insurance. "And it's a purely voluntary program. So you don't have to do it if you don't want to."

After it's plugged into the computer system (most vehicles beginning in 1996 have the required diagnostic port), the Snapshot transmitter device monitors time of day and vehicle speed, how many miles are driven and the frequency of hard braking. It also reports if the device is disconnected.

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.), then 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 percent 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.

But some skeptics wonder what Progressive will do with the information the electronic eavesdropper gathers. 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.

Marc Rotenberg, the executive director for the Electronic Privacy Information Center (EPIC), says his group hasn't looked at the Snapshot program specifically, but it has concerns whenever information on consumers is gathered.

"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.

Here's a typical comment, from "Wildblueflyingbear" at SlashGear's Snapshot forum: "(The) program probably had relatively benign intentions. But how can large companies and the government possibly leave it there? There is too much opportunity for mischief if we blindly give up privacy rights just to get a rebate check. It might work well now, but later on you could (regret) the day you first saw Progressive's commercials."

Progressive's website directly addresses those worries.

"No, Snapshot won't increase your rate," the company states, adding that "we won't share Snapshot data 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."

Hutchinson adds that Progressive can't track where you drive because the device does not include GPS technology. The worst that can happen, he claims, is not qualifying for a discount.

A Snapshot snapshot

Those assurances were enough for William Parsons, who recently participated and came away with almost a 15 percent rate cut. "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, who has a 2005 Honda Accord, 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.

"Linda Foss," a poster at SlashGear, also had braking issues. "I just connected it 2 days ago and was shocked by the number of hard brakes it recorded," she wrote. "Apparently, by 'hard braking' they mean using your brakes. I coast to most stops. But I do tap the brakes before pot holes and road patches the size of speed bumps. I am still hoping for a good discount as I do not drive much/far."

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

Snapshot is currently available in 39 states, with plans to offer it in more in coming months, the company says. You can find a list of participating states at Progressive's website.

Hutchinson notes that Progressive has been fine-tuning the program for a few years; it's seen as an improvement to the company's MyRate program, which required a six-month enrollment to possibly qualify for a discount.

"Snapshot is easier to understand" than MyRate, Hutchinson says. "We know from our research that this version will be more appealing because drivers can save money after just 30 days ... Plus, customers only have to give us a snapshot of their driving for one policy period, then they don't have to worry about the device anymore."