Progressive Phones Home

In last week's post, we explored the emerging practice of “vehicle telematics,” in which policyholders agree to have on-board devices mounted in their cars in exchange for reductions in their premiums.

Now, at least one major auto insurance carrier, Progressive, announced it is putting vehicles telematics into practice within a major market. The company extended its program that allows it to electronically track their driving habits to policyholders in Florida—the largest offering to date for this approach. After drivers sign up for Progressive's “Snapshot” program, the company sends them a palm-size device that plugs into the on-board diagnostic (OBD) port of their car. The device records and sends the driving data to Progressive.

Progressive says that after 30 days, customers will find out if they're eligible for a discount—up to 30%—based on their driving habits, and will see that discount applied to their policy.

People who drive less, in safer ways and during safer times of day are more likely to get a discount. At the end of the six-month policy term, Progressive determines the renewal discount and the customer returns the device. The device doesn't track vehicles' locations via GPS—only how, how much and when customers drive their vehicles. 

Richard Hutchinson, Progressive's general manager for usage-based insurance, was interviewed in the St. Petersburg Times on the announcement.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

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