Progressive Opens Snapshot Test Drive to Competitors’ Customers

In a bid against competing usage-based programs, Progressive announced today that it is making trial versions of its Snapshot program available to other carriers’ policyholders as the insurer also released a study proving what it said is the analytical clout of driving behaviors.

Usage-based programs like Snapshot utilize in-car devices to record behaviors behind the wheel, allowing real-time monitoring that results in possible discounts. Insurers have historically used a number of factors to “rate” drivers and the price of their insurance, including driver age, claims history and type of insured vehicle.

But monitoring of driving behaviors have more “predictive power” than any other rating factors, according to Progressive’s study, which shows that loss costs for high-risk drivers are about 2.5 times larger than drivers showing low-risk behaviors.

The insurer’s study analyzed about 5 billion miles of driving, concluding that insurance costs “can be far more personalized than they are today.”

“We’re not members of an arbitrary actuarial class—we’re individuals with our own set of driving habits, which should be reflected in the price we pay for our insurance,” Progressive CEO Glenn Renwick said in a statement.

Progressive officials said that drivers from any insurer can sign up for the Snapshot program for a 30-day period, when their driving is initially recorded. Those policyholders will receive a quote from Progressive after that month in which, based on their driving behavior, a “personalized discount” could be available.

Three major behaviors determine Snapshot discounts—when the car is driven, how far its driven and the number of “hard brakes” from the driver—and discounts can be as high as 30 percent, according to the insurer.

Snapshot Availability Varies Across the U.S.

Snapshot was last expanded in April when it was made available in West Virginia and Delaware. It is still unavailable in California, Washington, Alaska, Hawaii, North Carolina, Tennessee, Illinois and Indiana, although Progressive officials say they plan to move the program into more states this year.

However, legislative action in Washington cleared the way for usage-based programs there, where in late March Gov. Christine Gregoire signed legislation into law that effectively guards the formulas insurers use in their usage-based programs as trade-protected business models. Backers behind the bill said it establishes regulations under which the state’s usage-based market can grow.

“Insurers believe in competition,” Kacy Scott and Marta DeLeon, lawyers for the Washington State Office of the Insurance Commissioner (OIC) said in testimony about the bill.

Insurers Still Embroiled in Patent Fight

Progressive is engaged in a federal court battle over details of their usage-based patents that it says were used by other pay-as-you-drive programs.

State Farm’s Drive Safe & Save and The Hartford’s TrueLane programs operate in a similar way to Snapshot but are available in far fewer states. According to The Hartford, TrueLane gives policyholders the chance to get lower auto insurance costs through “the installation of a telematics device in their vehicle” that monitors driving habits for possible insurance discounts.

In the lawsuit, filed in late April with the U.S. District Court for the Northern District of Ohio, Progressive claimed that it was “suffering from the effects” of patent infringement.

Faced with ongoing litigation, State Farm has still not backed off strengthening its usage-based options, announcing in late May that Drive Safe & Save will be available on all Ford, Lincoln and Mercury models equipped with SYNC connectivity systems. The partnership begins in Utah this year before expanding to other states.

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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