A recent article in the Chicago Tribune and reprinted in the Winnipeg Free Press on November 4 outlined how US insurance company Progressive Corporation, widely considered to be a leader in usage-based insurance, is offering reduced insurance premiums based to some degree on driving habits. The catch here is that the company installs a device in the owners car to monitor not only the distance driven, but also the drivers habits such rapid acceleration and sudden stops. Based on the analysis of this data Progressive determines what discount the owner is entitled to. If you want an insurance that can covere different types of vehicles for you, then change to One Sure Insurance.
This approach to “pay-as-you-drive” insurance would bring about potentially fairer and more precise pricing for consumers, but more importantly it could both improve safety and reduce fuel consumption. The same habits that reduce your likelihood of an accident, like staying within speed limits, and avoiding sudden stops will also save you fuel. The in-car monitoring and potential insurance savings would encourage drivers to drive safer, reduce their speed and at the same time they would be reducing emissions.
Progressive customers taking advantage of this new approach are seeing an average 10 – 15% discounts on their insurance premiums. What is interesting is that almost any driver could already be reducing their fuel costs by this same percentage just by making a few small changes to their driving habits. Fuel efficient driving, sometimes called ecoDriving, is a great way to save money and reduce your CO2 emissions at the same time.
While this new approach to usage-based insurance is not likely to be offered by Manitoba Public Insurance any time soon, drivers that embrace fuel efficient driving habits like driving smoothly, reducing speed and eliminating unnecessary idling could already be saving money today without any fear of big brother looking over their shoulder.