A high tech scheme to measure driving habits could lead to lower insurance premiums. The pilot scheme, which began last month, is being tested out by the Progressive Group of insurance companies in the
Customers who register their vehicles in the company’s ‘TripSense’ pilot program first plug a data-logging device into a port in their car. The device, called TripSensor, is a free, matchbox-sized device that plugs into a vehicle’s On-Board Diagnostic (OBDII) port found near the steering column in virtually all 1996 or later model year vehicles.
Once installed, TripSensor records how much, how fast and when the vehicle is driven. This information is used to calculate the discount the customer may receive when they renew their policy.
TripSensor also collects information about rapid acceleration and braking that is not currently used to calculate the discount. Progressive is collecting this information to better understand if it is predictive of future accidents.
Toward the end of each policy period, customers use software provided by Progressive to download their driving data to a personal computer where they can view it to better understand the discounts they have earned and to upload the data to the company.
During the pilot, all new customers get a 5% discount on the current policy. In subsequent policy periods, they receive a 5% discount when they share their driving information with Progressive. Participants may also be eligible for a “usage discount” of up to 15% based on how much and when the vehicle was driven. And, an additional 5% can be added to or subtracted from the usage discount depending upon what percent of time the vehicle was driven slower than 75 mph.
At present, the program is limited to 5,000 drivers. And, while the company sells auto insurance in
Progressive has also tested out an idea that retrofitted Global Positioning System (GPS) and cellular technology into customers’ vehicles to calculate premium based in part on how much, when and where a vehicle was driven.
The test, conducted in