Allstate Launches Telematics-Based Auto Insurance Discount Program

Drive Wise telematics device

Photo Courtesy of Allstate

After rolling out its claims satisfaction guarantee test program earlier this month, Allstate auto insurance announced today that it is launching a new telematics-based discount program that monitors policyholders’ actual driving habits in order to determine whether they are eligible for a safe-driver discount.

Similar to Progressive’s snapshot discount program, Allstate’s latest offering — known as Drive Wise — uses a small device that plugs directly into an electronic port on the vehicle and collects certain information about the way the policyholder drives.

According to Allstate, the device only collects information that could be used in calculating a policyholder’s rating. These pieces of information include when and how far a policyholder drives and whether he or she exceeds an 80 mph speed or slams on the brakes at any point. This data will then be made accessible to users through the Allstate website.

The number of miles driven matters to an insurer because the more time spent on the road means the more chances to get into an accident and file a claim. Information about the times at which an insured car is driven because claims data may show that more accidents tend to occur in the very early morning or late at night.

An initial 10 percent discount is given to drivers for initial enrollment in the plan. And with an optimal safety record and low mileage at the end of the monitoring period, they can get up to a 30-percent reduction.

The program is voluntary and is currently only available to policyholders in Illinois, although the insurance company plans to expand the program to other states.

According to a press release from Allstate, use of the device can only result in more affordable auto insurance or no change at all. Premiums won’t go up based on driving scores.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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