I helped a new Dallas client with her car insurance this week. We were able to save her $300 a year over what she’s paying now and give her better coverage. One of the ways we added coverage and kept the price lower is by offering her a discount for agreeing to let the new car insurance company monitor her driving for up to 4 months.
Our client agreed to do having her driving monitored but had several questions she wanted answers to before agreeing to it. What data is the company monitoring? What will they do with that data? Is it shared with other car insurance companies? Will it impact her premium?
Most companies are monitoring items such as times of day a person drives, as well as distances. They also monitor acceleration and braking to see whether you’re slamming on the brakes on a consistent basis and racing to the next traffic signal. One of the biggest things most people worry about is if their speed is being monitored. It is, although, Progressive states they do not use this metric to determine a person’s rate at renewal.
The data that’s gathered is analyzed to determine how safe a driver is. Safeco also ties this in with forgiving an at fault accident, and uses the data to determine whether or not the accident should be permanently waived. No one shares their data with other insurance companies although some are making their findings available to the driver once the monitoring is complete.
What impact the gathered data will have on the renewal rate is difficult to answer. Progressive’s Snapshot is the longest running of these programs, and based on my experience, there may or may not be an impact on the policy’s renewal rate. If a person is driving in way the insurance company considers unsafe or reckless, then I would expect the rate to increase. If the person is driving in a safe and defensive manner, I believe there will be no impact.
Rates are still subject to fluctuate each year and that may result in a safe driver still having a higher rate simply due to the rate changing. One of my client’s biggest worries is would her rate change before the renewal next year? All of the companies I work with are not changing the rate before the renewal, however, if this turns out to not be the case, we’d simply find her another company with a competitive rate.
The length of time an insurance company monitors a person’s driving tends to be either 3 or 4 months. Progressive provides a temporary discount that may increase or be removed based on the driving data. Companies with a monitoring program include Progressive, Allstate, and now Safeco. MetLife is rolling out their new program now, and I believe this practice will soon become a standard offering by most insurance companies in all states.
Would you let your insurance company monitor your driving? Share why or why not, along with any questions you may have, with me on our Google + Facebook, and LinkedIn pages. I’d love to hear from you!