Using Tracking Device Can Cut Cost Of Insurance Premiums Substantially

By Angie Hicks of Angie’s List

If you could save 10 to 50 percent on your insurance premiums, would you plug a device into your car that lets your insurance company monitor how and when you drive?

While some people may liken insurance tracking devices to inviting Big Brother to be your back seat driver, a tiny but growing percentage of car insurance customers have installed monitors and most are getting discounts, according to experts our team interviewed.

Only about 1 percent of drivers are enrolled in what are often called pay-as-you-drive or usage-based programs, but two-thirds of participants are paying lower rates, according to highly rated insurance agents and Laura Adams, a senior analyst for

Adams and experts our researcher interviewed note that while insurance companies currently offer discounts for drivers with a good driving history, drivers who engage in riskier behavior aren’t being charged higher rates. They simply aren’t eligible for discounts.

Here are the main driving behaviors that insurers tend to track and reward:

-Driving at safe speeds

-Stopping in a safe manner

-Driving fewer than 25 to 30 miles a day

-Avoiding late-night driving

For example, Progressive gathers data through a palm-sized device called SnapShot (pictured above) that plugs into a vehicle’s onboard diagnostic port, usually found in the lower part of the dashboard or near the steering wheel. Other companies receive information from vehicle onboard communication systems such as OnStar, In-Drive or SYNC.

Information from Progressive’s Snapshot program, available in 45 states, is available online to participating customers.

Tracking driving habits began with private companies keeping tabs on their vehicle fleets, but a few years ago, the technology migrated to the insurance industry.

It’s up to individual drivers to decide if the possibility of saving money trumps privacy concerns. Adams says that when her company recently surveyed more than 1,000 people, 37 percent of respondents said they wouldn’t participate in a pay-as-you-drive program, while 35 percent said they would if they could cut their rates by at least 25 percent.

Source:  SacBee

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