Allstate to Expand Usage-Based Program to Seven More States

Nearly two years after Allstate introduced its usage-based insurance (UBI) program called Drive Wise in three states, the insurer is saying it’s planning on making it available in 10 total states by the end of this year.

Before the roll-out comes, though, the insurer is conducting an extensive test of Drive Wise to collect more data.

Allstate is organizing testing in which employees and agency owners volunteer to use Drive Wise, a telematics-based program that utilizes an in-car device to record driving behaviors like distances driven and how brakes are used.

There are currently 700 employees taking part in the Allstate test as the insurer is “actively seeking additional participants,” said Randy Birchfield, Allstate vice president of product operations, who added that Allstate is using the test within the company to grasp the pros and cons of a relatively new market.

“As most insurance companies, we’re in the process of continuing to understand the UBI market,” he said. “Having internal employees participate in testing certainly helps us get our arms around the information and how we might be able to help.”

Such monitoring is fed into a Web-based system where policyholders can view their possible eligibility for auto insurance discounts online and track their driving habits. Factors like how far a car is driven impacts coverage prices because the risk of crashes or accidents increases with longer distances.

The program’s “objective is to help our insureds become better drivers through recognition of how driving behavior affects their safety,” Birchfield said in an interview.

Drive Wise is currently available in Ohio, Illinois and Arizona. Allstate plans to expand the program into seven additional states by the end of the year, according to Birchfield, but he wouldn’t say which ones.

Customers can get a 10 percent discount during the first term of a Drive Wise policy just for enrolling; discounts afterward are based on driving performance but can be as big as 30 percent for the safest motorists with the fewest miles.

“We’ve had great experiences since we’ve launched the program, and our customers have expressed a great deal of satisfaction with it,” Birchfield said. “We expect to fully continue down the path of exploring UBI.”

Drive Wise launched in late 2010, and this latest development follows several other events in the UBI market, including Progressive announcing earlier this month that its Snapshot program will be offered as a 30-day trial to all drivers, regardless of who insures them.

Last week, telecommunications giant Sprint announced that it had completed testing of telematics framework using its 3G network that will be available to all insurers as a three-month UBI trial.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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