CAR INSURANCE Progressive unveils performance device
Insurer wants to track a driver's speed, distance and time on the road.
MAYFIELD HEIGHTS, Ohio (AP) -- A device that is no larger than a matchbook can attach to a socket placed under the steering wheel of any car built since 1996 and give an insurance company information about a driver's performance on the road.
In exchange for a willingness to provide the data, a driver could get up to 25 percent off a Progressive Corp. insurance premium, the suburban Cleveland-based insurer said this month in announcing the experimental venture it's launching in Minnesota. There currently are no plans to test the program in other states.
Progressive's plan would give customers the option of turning over details about their driving habits. The device gathers a driver's speed, time on the road and distance driven.
Car insurers generally gather personal information in determining a rate. Marital status, gender and the type of car driven usually come into play.
"It's a different kind of data than what has been collected in the past, but it is more germane than the things that are on insurance [policies] now," said Jim Haas, Progressive's direct-product manager for the device, known as TripSense.
After six months, which is one insurance term in Minnesota, participating drivers can unplug the device, which can then load data into a computer. Software will determine a driver's performance and the percentage discount for the term.
Drivers get a 5 percent break on insurance for simply turning over their data, with other discounts for meeting incentives. Drivers get a deduction for staying off the road between midnight and 4 a.m., for example.
The first 5,000 drivers who sign up will take part in the free TripSense test, which will last for at least a year, Haas said.
Larry Ponemon, chairman of the Ponemon Institute, which studies privacy issues, warned that voluntary discounts can work against customers. He said businesses can drive up prices and, in exchange for information, provide discounts on an inflated price.
But Haas said Progressive is offering a discount on its existing rates. He also said Progressive would not share the information it gathers.