Pay as You Drive Auto Insurance
Posted by
Donald CaminitiAugust 05, 2008 9:00 AMTags:
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The Atlantic City Press recently reported that beginning Aug. 8, Progressive Casualty Insurance Co. will offer a policy that allows the company to rate drivers based on how and how far they ctually drive. Motorists must allow a high-tech monitoring device to be installed in their car that tracks speed and mileage, as well as how frequently the brakes are used, what time of day the driving is done and how quickly the car stops. The company bases insurance rates on how risky the driving behavior is.
Progressive says some drivers could save as much as 60 percent off their premiums.
The pay as you dirve approach however is not without its critics. Some worry that it penalizes night-shift workers who must drive during riskier times of day. The American Civil Liberties Union in Minnesota points to privacy issues - one more piece of personal data on a corporate computer. .
Under the Progressive program, customers can earn a first-term discount of as much as 10 percent just by signing up. When they renew their policy, the company estimates that the information gleaned during that year could lower their rates by as much as 60 percent or raise them as much as 9 percent.
New Jersey will never be a low-cost insurance state - its cost of living, density and demographic factors drive up that cost. But it can keep the cost down for some catagories of customers. But, perhaps with this new choice, some drivers will see a reduction in their insurance rates.