We had a feeling it was coming. Since the introduction of programs like Progressive’s Snapshot, insurers have claimed that their driver monitoring programs would not punish bad driving, and instead only reward good driving. But this model didn’t seem sustainable to us—if everyone is saving, where is that discounted money coming from?—and, as it turns out, telematics programs are indeed turning the corner from discount-only to offering rates truly based on driving habits, both by way of savings and by higher rates.
Forgotten what telematics are and how insurance companies use them to track your driving? We briefly summed the practice up in our post How to Lower Car Insurance for Young Drivers, but basically vehicle telematics or vehicle tracking is a monitoring system that insurers use to see if you are a good driver. It tracks your location, movement, and status of the behavior of your vehicle. Many large insurance companies have utilized telematics through different monitoring programs:
- Progressive’s Snapshot
- State Farm’s OnStar
- National General Insurance’s OnStar
- Allstate’s Drivewise
Progressive’s Snapshot, according to the company, “is your chance to take control of what you pay for insurance. Drive less, in safer ways, and during safer times of day to maximize your results.” Snapshot has been rewarding good drivers for years with discounted rates. What exactly is calculated into your Snapshot result and how does it affect your car insurance rate? Progressive lists on their site three factors:
- Hard braking—Hard brakes are decreases in speed of seven mph per second or greater. Your Snapshot device will “beep” when you brake hard. Minimize hard braking to work toward a discount.
- Mileage—Total distance of trips. To earn a discount, try to minimize your time behind the wheel by combining trips, carpooling or using public transportation.
- Time and day—The number of minutes you spend driving during higher risk hours—the highest risk are between midnight and 4 a.m.
These three factors decide whether or not you receive a discount on your insurance—and, as of very recently, they also decide if your rate will increase.
Aggressive Drivers Beware
Progressive has always said that those drivers who may not be quite as stellar and may have a little bit of a lead foot won’t be penalized for using their Snapshot program. But this is not the case anymore. Progressive now says that it will impose a surcharge on aggressive drivers that are using their Snapshot program. This surcharge can be up to a, “maximum 10 percent increase for riskier habits.” As of right now, this change in policy is only effective in Missouri and only affects new participants to the program. Progressive reassures customers in other states saying that, “riskier driving habits will not lead to a discount, but there is no change to your premium.” Even though they won’t be penalized now it is very likely that this change will be rolling over to other states in the future. In other words: If you enjoy driving long distances in the middle of the night while occasionally hard braking then you may be considered an aggressive driver and Snapshot is not for you. If you already have Snapshot and this news makes you uneasy or you work nights, never fear: According to the company, you can still cancel at any time and opt out of the Snapshot program.
So, if you use Progressive’s Snapshot, be aware that their policies could be changing in your state soon, but overall, if you you are a good driver you have nothing to worry about because Snapshot could still bring you some hard-earned discounts.