Progressive insurance offers discount for exact mileage records
Posted: Friday, March 17, 2006
DES MOINES, Iowa (AP) -- Taking some of the guesswork out of pricing car insurance is the goal of an Ohio insurance company, which is offering discounts to drivers who report their exact mileage.
The Progressive Direct Group of Insurance Companies is testing the concept in Iowa and Virginia and if it works, could roll out the discounts nationwide.
In the pilot program, drivers who sign up get a 5 percent discount on their insurance premiums. They agree to log on to a secure Web site every six months, when they renew their policy, and record the mileage on the car.
Those who drive less than 3,000 miles a year can save another 10 percent on their premiums.
Smaller savings ranging from 9 percent to 1 percent are awarded to drivers, depending on the mileage driven.
An average customer with a $670 per year premium could save about $100 a year with the maximum 15 percent discount, the company said in a statement.
The pilot project discounts are offered only to Progressive Direct customers, those who buy auto insurance through the company's toll-free telephone line or on its Web site.
Research has shown that customers who drive more miles are more likely to be involved in a crash, said Ian Forrester, the company's Iowa product manager.
He said accurate mileage combined with other information used to price car insurance policies could help make insurance pricing more accurate.
"If we can offer the most accurate rates, then that is a good thing for both consumers and for us," he said. "I think that anytime you're able to de-average rates that are in the marketplace, you should be able to offer lower rates for consumers who are lower risk and that's what we're trying to do."
Other insurance companies offer rate discounts for low mileage drivers, but they typically seek a customer estimate of how much they'll drive.
"This program is just intended to help us better understand that correlation between driving behaviors and the risk of being involved in accidents," Forrester said.
New Progressive Direct customers in Iowa can sign up for the program within 30 days of buying a new policy. Existing customers have 30 days from the time of their policy renewal.
Forrester said he has no concerns that consumers could see such programs as intrusive.
"We take customer privacy and customer choice very seriously," he said. "This program is entirely voluntary. Customers can opt in and opt out anytime they want."
Progressive also is testing a discount pilot program in Minnesota called TripSense, in which drivers voluntarily share driving data in exchange for receiving discounts on their renewal policy. The data is collected by a small device that records information about how often, how fast and when their vehicle is driven, along with information about acceleration and braking.
A nationwide driving habits research study also is under way that uses the same technology to gather the same kind of driving data; customers are reimbursed $50 for voluntarily sharing six months of data from each car in the program.
The Progressive Direct Group of Insurance Companies is testing the concept in Iowa and Virginia and if it works, could roll out the discounts nationwide.
In the pilot program, drivers who sign up get a 5 percent discount on their insurance premiums. They agree to log on to a secure Web site every six months, when they renew their policy, and record the mileage on the car.
Those who drive less than 3,000 miles a year can save another 10 percent on their premiums.
Smaller savings ranging from 9 percent to 1 percent are awarded to drivers, depending on the mileage driven.
An average customer with a $670 per year premium could save about $100 a year with the maximum 15 percent discount, the company said in a statement.
The pilot project discounts are offered only to Progressive Direct customers, those who buy auto insurance through the company's toll-free telephone line or on its Web site.
Research has shown that customers who drive more miles are more likely to be involved in a crash, said Ian Forrester, the company's Iowa product manager.
He said accurate mileage combined with other information used to price car insurance policies could help make insurance pricing more accurate.
"If we can offer the most accurate rates, then that is a good thing for both consumers and for us," he said. "I think that anytime you're able to de-average rates that are in the marketplace, you should be able to offer lower rates for consumers who are lower risk and that's what we're trying to do."
Other insurance companies offer rate discounts for low mileage drivers, but they typically seek a customer estimate of how much they'll drive.
"This program is just intended to help us better understand that correlation between driving behaviors and the risk of being involved in accidents," Forrester said.
New Progressive Direct customers in Iowa can sign up for the program within 30 days of buying a new policy. Existing customers have 30 days from the time of their policy renewal.
Forrester said he has no concerns that consumers could see such programs as intrusive.
"We take customer privacy and customer choice very seriously," he said. "This program is entirely voluntary. Customers can opt in and opt out anytime they want."
Progressive also is testing a discount pilot program in Minnesota called TripSense, in which drivers voluntarily share driving data in exchange for receiving discounts on their renewal policy. The data is collected by a small device that records information about how often, how fast and when their vehicle is driven, along with information about acceleration and braking.
A nationwide driving habits research study also is under way that uses the same technology to gather the same kind of driving data; customers are reimbursed $50 for voluntarily sharing six months of data from each car in the program.
Story Comments
Read More and Post Comments 0 comment(s)
Please note: The following are comments from readers. In no way do they represent the views of The Sioux City Journal or Lee Enterprises. We will not edit or alter your comments, but we do reserve the right to not post or to remove comments that violate our code of conduct. No comment may contain potentially libelous statements; obscene, explicit or racist language; personal attacks, insults or threats. Terms of Service
