Insurer's high-tech device assesses risk

Is it Big Brother in the glove box or a high-tech way to reward good drivers?

The Progressive Group has begun offering certain of its New York customers premium discounts of as much as 30 percent if they allow their driving to be monitored electronically and are deemed at low risk of accidents. Under the "Snapshot" program, drivers who buy their insurance directly from Progressive Advanced Insurance Co. install a device in their cars to record the miles driven, the times of day they drive and whether they brake frequently.

Higher miles and night driving increase the risk of crashes, while, Progressive contends, frequent braking indicates aggressive driving - and a bad insurance risk.

The device also detects a vehicle's speed, acceleration and how quickly the vehicle is going around corners, but Richard Hutchinson, a Progressive general manager, says those are not used to determine eligibility for the discount.

"We base it on your mileage, your braking and the time of day," he said.

A number of companies have offered or are experimenting with "pay as you go" insurance rates with discounts for low-mileage drivers. Some employ electronic devices to monitor mileage driven. GMAC Insurance, for example, uses General Motors' OnStar communications system to record mileage for customers who sign up for low-mileage discounts.

But few other than Progressive's Snapshot also record driver behavior. One company that does so for commercial fleets, Liberty Mutual, is being sued by Progressive, which contends patent infringement. The suit is pending.

The New York State Insurance Department says it believes Progressive's Snapshot is the only program of its kind for private car owners available in the state. It's been offered officially since last Friday. Progressive said about 100,000 car owners have signed up in 27 states, including New York.

Drivers are told after the first 30 days driving with the device if they are eligible for a discount and, if so, they get it immediately. But leadfoots can't simply behave themselves for 30 days, then resume their old ways. The device stays plugged in, transmitting data for five more months before it's returned to Progressive. And Progressive can ask drivers periodically to reinstall the device to get an updated picture of their driving.

The company says customers can opt out of the program at any time and that rates can only go down - never up - as a result of their participation. It says the Snapshot device cannot track the vehicle's location.

The Philadelphia Inquirer reported in July that city and Pennsylvania state officials have raised privacy concerns about the program. As a result, Progressive suspended the program in that state.

A spokesman for New York State's Insurance Department, Ron Kluge, said in an e-mail that the department didn't consider the program intrusive because it is voluntary.

One of Progressive's New Jersey customers, who opted for the program when it became available there two years ago, says he is saving about 25 percent on premiums for his car, a Subaru Outback, and has no privacy issues.

"It's a voluntary program," said Patrick Campbell, 30, of Midland Park. "Nobody is forcing you to do it."

He is married, has one child, works at home and says he and his wife drive about 15,000 miles a year.