Progressive announced a two-state expansion in as many weeks of Snapshot, its featured usage-based insurance program, which underscores both the growth of a kind of coverage now available in almost every state and the popular technology behind it that records driving behaviors and vehicle data, according to AutoInsurance.com.
Now available in 41 states and the District of Columbia, Snapshot was made available to the insurers’ customers in Delaware last week and in West Virginia this week. The program uses a palm-sized, in-car device that records driving data including acceleration, braking, turning and distances and times driven. The device logs that data, and the company makes it available on a website, where policyholders can track their driving and ultimately get cheaper auto insurance premiums for displaying safer habits behind the wheel.
Further Snapshot Expansion Could Follow Recent Growth
With an estimated 500,000 customers, company representatives say that Snapshot is the most widely used and available program of its kind.
Progressive’s firm hold on the usage-based market might partly be because of its possession of patents on the vehicle telematics technology behind in-car data recording, according to a report from the Brookings Institution.
"Any insurance firm interested in offering per-mile insurance pricing understandably might be concerned that doing so would open it up to a possible patent infringement suit," the report’s authors stated, adding that defending such suits could be "enormously expensive."
But Progressive’s hold may be loosening. The Brookings report was published in 2008, and since then several other major insurance carriers have usage-based programs that utilize similar data-recording devices, including Allstate’s Drive Wise and State Farm’s Drive Safe & Save. However, neither is available in as many areas.
GMAC’s usage-based program is as widely available as Snapshot, but uses an Onstar device that logs fewer kinds of driving data.
Snapshot is still unavailable in California, Washington, Alaska, Hawaii, North Carolina, Tennessee, Illinois, Indiana and Massachusetts, but one of those states might soon be off that list.
Earlier this month, Washington state Gov. Christine Gregoire signed into law HB 2361, which allows insurance companies to classify formulas used in usage-based rates as trade secrets that are protected from public view. The legislation was supported by Progressive Insurance, and the development could entice the insurer to expand Snapshot to the Evergreen State in the near future.
Government also Taking Notice
The telematics technology behind usage-based insurance programs is also making waves outside of the industry, with federal officials commissioning several telematics-related studies.
In a report released last month by North Carolina’s Program Evaluation Division, researchers recommended that the state utilize telematics to manage its fleet vehicles. The technology would be "cost-effective," according to the report.
A 2009 report from the University of Delaware analyzed telematics-supported vehicle miles of travel (VMT) as a funding mechanism for the Department of Transportation, stating that such an approach could be "an alternative or supplement to fuel taxes" that have been the transportation system’s main funding mechanism for decades.
For more on this and related issues, head to http://autoinsurance.com/ for access to an easy-to-use quote-comparison generator and informative resource pages.
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