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New Discount Opportunities for Auto Insurance Clients

As the insurance marketplace evolves, insurance companies have developed new ways to utilize modern technology in ways to help provide additional discounts for customers as well as gain statistical data to improve the accuracy and stability of insurance rates in the future.  Many of Absolute Integrity clients have already participated in one of these programs. 

You may have been presented, either by us or by another insurance company, with an opportunity to sign up for a program that involves you installing a device in to your vehicle that monitors driving habits, miles driven, time of day driven, or other factors.  If so, you have heard about the latest trend in auto insurance that isn't going away any time soon.

Most of us realize that our driving records matter with regards to our cost of auto insurance.  It makes sense, right?  The person with the DUI who is 20 years old should not be paying the same for auto insurance as someone who is completely clean, been driving for 40 years, and has never had an accident.  This makes sense, right?

Most of us also realize that credit history matters with regards to auto insurance, but this factor doesn't always make the most sense, right?  While financial responsibility (or lack thereof) has shown to be a great variable for pricing out insurance plans, it's one variable that isn't always as easily understood by the consumer.

Thankfully, many insurers have some out with programs that actually do make more sense to the customer!  A Personalized Discount program!

These devices, what do they do?

When you sign up for an insurance plan with one of these devices, you usually enroll online and then receive a device that plugs in to your diagnostic port of your vehicle (very easily to install for the consumer).  These devices read from the car's computer (so the data is already collected, the device just sends this to the insurance company program).  The device can monitor things such as time of day driven, harsh braking habits, fast acceleration habits, miles driven, and more.

What's in it for the insurance company?

The data is initially gathered during the program period, usually 90-120 days (sometimes longer).  A discount is calculated based upon, usually miles driven and driving habits, and then applied for your policy permanently.  After this point, all of your personal identifiable data is destroyed (no data linked to the consumer is retained).  However, data including gender and location and driving habits are maintained.  This data helps insurers understand how certain genders in certain locations drive and can help them better pinpoint the most appropriate rates for similar consumers in that area.

For example, if ABC Insurance sees that 30 Year Old Females in Zip Code 46205 tend to drive exceptionally well, cautiously, carefully, and have very few accidents... then ABC Insurance can use that data to provide better rates for all 30 Year Old Females in 46205. 

What's in it for the consumer?

This question is easy!  Discounts galore!  Permanent policy discounts!  It's easy to understand that how well they drive should have a direct impact on what you pay for auto insurance.  These technology based devices now give you the opportunity to earn such discounts! 

With most programs, the discounts remain on the policy permanently (or at worst, as long as you own the specific vehicle that was enrolled in the program). 

Some companies provide discounts just for lower mile drivers (typically driving under or around 1,000 miles as month), others look at the full picture of your driving habits (miles driven, time of day driving, acceleration and braking habits, etc.).

Isn't this just Big Brother watching my every move?

Yes and no, but mostly no.  :-)   While your data is compiled, it is kept private.  The insurers that we use at Absolute Integrity Insurance use third party technology companies to administer these programs.  So while the data is gathered by the third party, the only personal identifiable information sent to the insurance company is your discount amount (or percentage), miles driven, vehicle on program, and your policy number (so they can place the discount on the appropriate vehicle).  Data linking your personal identifiable information with regard to braking habits, location of driving, and other habits is destroyed.  The only data retained for analysis is, as discussed above, gender, age, and location. 

The insurer can never come back and say "John Smith likes to slam on the brakes a lot, so we're setting him up for massive rate increases every year".   Now if John Smith does do a lot of harsh braking he may end up with a smaller or no discount through the program, he won't be personally charged with rate increases as a result of that driving habit.  In fact, the insurer cannot see this specific data (all that the insurer sees is John Smith earns XX% discount on XYZ Car).

Who offers these programs at Absolute Integrity?

These programs are available, at the time of this writing, to our Travelers, Safeco, Nationwide, and Progressive clients.  Below is a very brief synopsis of each program with these carriers.

Travelers IntelliDrive - Traveler's IntelliDrive program offers a miles-driven-based program only, rewarding drivers with a 10% Participation Discount for your first policy term, and then between 0%-30% based upon miles driven (under 13,000 Annual Miles is what Travelers gives a discount for).  The program period is approximately 4-5 months, after which your miles are annualized, and at renewal the permanent discount is applied to the vehicle.

Safeco RightTrack - Safeco's RightTrack program offers a program that considers your unique driving habits including miles driven, time of day driving, acceleration and braking habits, and more.  The program period is 90-100 days.  You get a 5% discount up front for enrolling and then up to 30% based upon how well you do.  The unique thing with Safeco is, by participating, you maintain the 5% discount for the life of your time with Safeco (EVEN if you are a terrible driver and qualify for no discount).

Nationwide SmartRide - Nationwide's SmartRide program is the newest of our programs.  It provides between a 10%-40% discount on participating vehicles, and is based upon driving habits.  There is an enrollment discount of up to 10% initially, and then your permanent discount will apply at all future renewals.

Progressive Snapshot - Progressive's Snapshot program is one that also looks at the full picture of your driving habits.  Progressive does give an enrollment discount between 0% and 10%, which is replaced by the permanent discount (up or down) after the evaluation period, usually about 5-6 months (sometimes longer).  The unique thing with Progressive is, you can participate again if you feel like you'd earn a better discount at a later time (however, just be mindful that the new discount, more or less, will replace the previously earned discount).  Progressive is the only program that could potentially result in a small surcharge at the end of the evaluation period (up to a 3% increase).  While the surcharge is rare, it is possible for drivers with very consistent habits of harsh braking, rapid acceleration, early AM driving (before 5AM), etc.

New programs and enhancements are fairly consistent, so stay tuned for updates to our available programs in the future!
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