SEATTLE — A new and growing trend in auto insurance offers reduced premiums to people who drive less. It’s known as usage-based auto insurance, where your premiums are lower, because you’re not on the road much. If you qualify, depending on where you live, you could lower your premiums by 10% to 15%. Usage-based auto insurance takes into account the amount of driving you actually do. Karl Newman of the Northwest Insurance Council says this relatively new coverage is a growing trend. “With most companies, if you ride your bike, you have to still report your mileage driven to work. So when you do take your car, you’re being rated for usage that perhaps isn’t accurate,” Newman said. “This gives companies the ability to offer a very accurate rate based on your actual usage of the vehicle.” Newman says some companies use the honor system, where once a year you report your mileage based on your odometer reading. The insurance company adjusts your rate accordingly based on the number of miles you drive. Other companies use technology to track both your mileage and your driving habits. If you drive less, and drive during safer times of the day, you can apply for a discount. People who qualify can cut their auto premiums by an average of 10 to 15 percent. Some drivers can reduce their premiums by a third. Unfortunately for most Washington drivers, mileage-based policies are not available in Washington state yet. But insurance companies say the trend is spreading across the country, as an incentive to get more people to do what Joe does — and leave that car at home more often. The state Insurance Commissioner’s office says Unigard Insurance currently has a pilot project with King County, and Safeco offers usage-based policies to commercial customers only. Progressive seems to be the big player for individuals, with a usage-based program called “Snapshot” in 29 states so far, including Oregon. “Drivers plug a device the size of a garage door opener into the on-board diagnostic (OBD) port of their car,” Progressive Public Relations representative Brittany Senary said by e-mail. “The device records and sends the driving data to Progressive, and we use that information to calculate their rate. After 30 days, customers will find out if they’re eligible eligible for a discount – up to 30 percent – based on that 30-day ‘snapshot’ of their driving habits. At the end of a six-month policy period, Progressive calculates the renewal discount and customers return the device to Progressive. Drivers’ rates can’t go up with Snapshot. And the discount is not based on location or speed. The device does not have GPS, so we don’t know where the car is. In addition, we don’t take into account how fast the car goes,” Senary said. Progressive could not say when it plans to launch the usage-based program here in Washington. Senary says the company will continue to roll out the program on a state-by-state basis this year. By Connie Thompson
KCBY-TV, 3451 Broadway, North Bend, OR 97459
Story Published: Feb 8, 2011 at 9:05 AM PST
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