Auto Insurance Consumers See Expanded Usage-Based Options

Los Angeles, Calif. (PRWEB) August 20, 2011

Modern technology is taking the guesswork out of calculating auto insurance discounts for safe driving and low mileage, according to OnlineAutoInsurance.com.

The trend could be welcome news for consumers who want to find out how much car insurance will cost if they’re willing to install a high-tech gizmo that monitors their driving habits.

At least 13 coverage providers now offer “usage-based” or “pay-as-you-drive” programs that can provide discounts if policyholders verify that they drive fewer miles, according to the Insurance Information Institute (III). And insurers are increasingly offering voluntary programs that use telematics devices to track driver behavior in addition to how many miles are logged.

“Policyholders who tend to drive at less risky times of the day and whose driving habits reflect an awareness of road safety receive a lower rate,” the institute reports in an issue update on its website.

As III points out, coverage providers have long used policyholders’ reported mileage and driving records to help set policy rates. But telematics are taking estimates out of the equation and delivering data straight from driver to insurer.

State Farm earlier this month introduced its new In-Drive service, which uses a device inserted into a vehicle’s diagnostic plug to monitor speed, acceleration, braking and other data. The service also lets policyholders plug into the company’s Drive Safe & Save plan, which rewards motorists for logging low mileage.

Drive Safe & Save is State Farm’s answer to usage-based programs such as Progressive’s Snapshot and Allstate’s Drive Wise.

Until now, only those State Farm customers whose vehicles were outfitted with OnStar could electronically submit their odometer readings to Drive Safe & Save. Otherwise, mileage had to be reported to State Farm before each six-month policy renewal.

In-Drive, which the company says will allow policyholders to save 20 percent or more on premiums, will do all the reporting for those motorists.

III officials say the direct link between policyholders and insurers could also help improve driver safety, in addition to saving policyholders money.

Services such as In-Drive and Snapshot provide “more immediate feedback to the individual driver about the riskiness of his or her behavior and therefore may be more successful in changing bad habits,” the institute reports.

The driver habits that providers are monitoring can have ramifications that go far beyond the cost of auto coverage, safety experts say.

Late-night driving, for example, often results in motorists fighting fatigue, which the National Highway Traffic Safety Administration (NHTSA) says causes thousands of auto crashes annually.

NHTSA reported in 1996 that there were about 56,000 crashes each year in which driver drowsiness or fatigue was cited by police. That led to roughly 1,550 deaths and 40,000 nonfatal injuries.

Source: http://www.nhtsa.gov/people/injury/drowsy_driving1/drowsy.html

To read more about this and other insurance issues, go to http://www.onlineautoinsurance.com/quotes/how-much-car-insurance-costs.htm where you will find informative resource pages and a free-to-use quote-comparison generator that consumers can use to get sample premiums for many vehicle makes and models.

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