Driving Today News
Sep 2, 2004
Pay Insurance by the Mile
Drive less, pay less. That's the simple concept behind TripSense, an innovative usage-based auto insurance discount pilot program now being offered to 5,000 drivers in Minnesota by the Progressive group of insurance companies, the third largest provider of auto insurance in the U.S. Program participants are eligible to receive a discount of up to 25 percent from their established rates depending on how much, how fast and when they drive. Drivers interested in the program can contact the company.
Customers who register a vehicle in the TripSense pilot program plug a data-logging device into a port in their car. The device, called TripSensor, collects information about the vehicle's use, including how much, how fast and when the vehicle is driven. Participants in the TripSense program will receive a five percent discount on the six-month premium for each registered vehicle. In subsequent policy periods, TripSense customers earn a five percent discount if they choose to upload their driving data to Progressive. Customers can also receive up to 20 percent more in discounts based on how much, how fast and when they drive. Sharing driving data with Progressive is always optional, but necessary to earn a discount in future policy terms.
Progressive tested this usage-based insurance discount program earlier this year when it offered 250 drivers $25 to plug a data-logging device into their vehicles to collect information for 30 days, upload their data to Progressive and complete a survey about the experience. In the test, a discount on future policy periods was not offered, but had it been, the average member of the test group would have been eligible for a 7.5 percent discount on the registered vehicle in the next policy period.
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.