State Farm Expands Usage-Based Program with Ford Partnership

State Farm announced today that it is partnering with Ford to expand the technology used in its featured usage-based insurance program.

Drive Safe & Save, a discount program that adjusts coverage rates based on driving statistics, will be available on Ford, Lincoln and Mercury vehicles equipped with the automaker’s SYNC technology, a connectivity system that regulates a range of in-car features from emergency calling to voice command to diagnostics. SYNC-based enrollment in State Farm’s program will begin in Utah later this year before expanding to other states, according to a company statement.

Initial savings on auto coverage from Drive Safe & Save using SYNC will be about 5 percent, and discounts are adjusted after each six-month renewal period, according to the insurer, which added that motorists driving the least number of miles can save up to 40 percent. Those who drive about 1,000 miles a month should save around 10 percent, according to the company.

Partnership Nixes Subscription Need

Drive Safe & Save is currently available in 14 states: Alabama, California, Colorado, Florida, Georgia, Illinois, Indiana, Michigan, Minnesota, Ohio, Pennsylvania, Texas, Utah and Washington.

In most states where Drive Safe & Save is available, the program requires additional subscription to OnStar or Onstar FMV technology that collects the data on which the insurers bases possible insurance premium discounts on the number of miles a motorist drives.

The Ford partnership will eliminate the need for a subscription because of Vehicle Health Report (VHR) technology that is standard in SYNC vehicles made in 2009 and later. Drive Safe & Save will use the VHR diagnostic feature to compile usage-based statistics used in discounts for eligible motorists, according to Doug VanDagens, global director of Ford Connected Services.

Currently, there are about 3 million SYNC-equipped cars with the VHR feature, VanDagens said.

Litigation Ensues Over Usage-based Tech

Several insurers have usage-based programs that help policyholders get cheap car insurance on their own through in-car technology that monitors their driving habits and reports possible insurance coverage discounts based on those habits.

State Farm and The Hartford are currently defendants in a federal lawsuit brought by Progressive, which claims that patented technology in its usage-based program, Snapshot, was illegally replicated by the two insurers.

The lawsuits were filed April 30 with the U.S. District Court for the Northern District of Ohio and are referenced as 12cv1070 for The Hartford case and 12cv1068 for the State Farm case.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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