“This is a brand new way to price car insurance that allows drivers to pay based on how they actually drive.” -Richard Hutchinson, general manager for the new “MyRate” program at the Progressive Group of Insurance Companies
Here‘s an idea that should be readily applied in the trucking industry: give insurance discounts based on good driving data. It‘s a concept now being applied to the car-insurance world, but one easily applicable to truckers, since the technology being used is already onboard many commercial vehicles already.
It‘s called “behavior-based insurance” and it relies on data recorded by a small device at attached to the vehicle that records vehicle speed, hard braking incidents, following distance, and other metrics, along with when the vehicle is being operated (specific time periods during day and night. Data that indicates good driving habits equals a lower risk profile for a crash - and that means lower premiums for those drivers, says Richard Hutchinson, general manager for the new “MyRate” program at the Progressive Group of Insurance Companies.
“Are you the poster child for safe driving, always leaving plenty of space between you and the car ahead? Or a business traveler who parks your car at the airport or train station several days a week? Or maybe you have a car that you only take out for a spin on warm summer days. If so, your car is probably less likely to be involved in a crash - so shouldn‘t you pay less for car insurance?” he notes in a press release announcing the new program.
MyRate offers lower rates on vehicles that are driven in less risky ways - giving car drivers a customized rate based on how, how much, and when their car is driven. It‘s now available to drivers in Maryland, Alabama, and New Jersey that purchase polices directly from Progressive online or by phone though it‘ll become available through independent insurance agents beginning Sept. 26 this year.
“MyRate is designed for consistent and safe drivers,” Hutchinson says. “It‘s for people who drive at low risk times of day and who keep alert for others on the road. They don‘t make fast lane changes or follow too closely behind other drivers so they don‘t have to over-react or slam on the brakes.”
The small wireless device Progressive plugs into a port in their car allows the company to “see” see how cars are being driven, how much they drive, and when it‘s being operated, he explains. Cars driven less often, in less risky ways and at less risky times of day can receive a lower premium - a first-term discount of up to 10% just for signing up. Then, upon policy renew, they could get a 25% discount or more based on their driving habits. There is also a $30 technology expense each policy period for the cost of the device and data transmission, Hutchinson adds.
“Customers can also access their driving data on a secure, password protected Web site and get an up-to-date view of their driving habits and how those habits are affecting their rate,” he says. “Customers who don‘t like what they see can modify their driving behaviors in ways that can lead to a discount, such as driving more defensively, driving less, and driving at less risky times of day.”
This isn‘t the first time Progressive has dabbled in information technology to find ways to lower insurance premiums for customers and risk exposure for themselves. The company‘s initial foray into usage-based insurance started in 1999 with a program in Texas called Autograph, followed by a pilot program in Minnesota, Michigan, and Oregon using “TripSense” back in 2004. Now, MyRate is stepping to the fore, with plans to roll it out nationwide pending regulatory approval by the states.
Needless to say, a program like this would be an easy slam-dunk in trucking‘s corner of the world, I think. For starters, devices capable of detailed data capture and transmission already exist onboard many commercial vehicles from many different vendors - Qualcomm, PeopleNet, and Xata, just to name a few. Insurers could easily tap into these systems for the data they need and offer safe drivers - from owner-operators up to the big fleets - insurance discounts.
Of course, it can‘t be done overnight, but the benefits seem clear. Any independent or fleet willing to share data proving they drive safe and professionally at all times deserves an opportunity to save money on their premiums - for that, in turn, gives the insurance carrier proof of a lower risk profile. This is a pretty clear-cut win-win for truckers and their insurance providers, courtesy of technology. Let‘s hope someone picks up this ball and runs with it.