New Pay-As-You-Drive Programs Introduced in Penn. and Texas

It was announced Monday that Pennsylvanians and Texans would be the latest drivers to gain access to two increasingly popular discount car insurance programs that provide price breaks to motorists who put in fewer miles behind the wheel.

OdometerState Farm said it is rolling out its Drive Safe and Save program in Texas, while Progressive will be introducing its Snapshot program to the Pennsylvania auto insurance market.

Although similar, the Snapshot and Drive Safe and Save programs have important differences, and they are at different stages of availability.

Both programs use on-board devices to transmit mileage data to insurers and allow for savings of up to 30 percent for policyholders.

While Snapshot and Drive Safe and Save are both labeled as mileage-based discount programs, Progressive actually takes into account more than just annual mileage. Also considered are whether drivers have any hard-braking events and the times of day at which they drive. State Farm’s program takes only mileage into account for the price break.

Snapshot Approaches Nationwide Availability, Access to Drive Safe and Save Remains Limited

With the introduction of Snapshot to Pennsylvania, Progressive’s discount program is now available in two-thirds of the United States. That makes it the most widely available usage-based plan in the nation.

The availability of other major insurers’ data-based discounts pale in comparison. Geico has no such program, Allstate has only launched a pilot program for its usage-based plan and Texas is only the fourth state to have access to Drive Safe and Save.

In addition, only a portion of Texans will be able to enroll in the State Farm program. While any Progressive policyholder can take advantage of Snapshot by ordering from the company a small device that plugs into an on-board port and transmits data to the insurer, State Farm’s Drive Safe and Save will be available only to policyholders who have OnStar with a Vehicle Diagnostics program activated. According to State Farm, about 387,000 of their Texas policyholders have vehicles that are equipped with OnStar.

Snapshot is already available in Texas.

According to the Texas Department of Insurance, the latest figures show State Farm has the largest share of the Texas private passenger auto coverage market, while Progressive has the third largest. State Farm’s share is about 18 percent, while Progressive’s is about 8.

Snapshot Comes to Pennsylvania Only After Privacy-Concern Setback

Progressive originally intended to introduce the Snapshot program to Pennsylvania in the summer of 2010, back when the discount plan was still known by its old name, MyRate. But concerns from both consumer advocates and the Department of Insurance delayed its implementation.

The Philadelphia Inquirer reported in July that Chuck Romberger, director of the Property and Casualty Bureau, called Progressive’s plan for setting rates based on the usage-based program ”completely ambiguous. It didn’t have any details whatsoever.”

There were also concerns about use of the data collected by the insurance company. According to the Inquirer, Philadelphia’s director of consumer affairs had reservations at the time about a lack of information as to how the data could be used or shared.

 

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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