Flo, the perpetually perky Progressive Insurance spokeswoman, hinted it was coming during a Super Bowl commercial that aired locally.
And today it's official: Progressive is rolling out a usage-based insurance discount in Florida, saving drivers who agree to be tracked up to 30 percent based on how, when and how much they drive. The program, called Snapshot, gives customers a tiny device to plug into their vehicles to capture driving habits for 30 days. Drivers rack up discounts if they travel during times when crashes are less likely, drive less overall or make few sudden stops.
"We're very excited. Florida is our largest market, and this is a major milestone for us," said Richard Hutchinson, Progressive's general manager for usage-based insurance.
Hutchinson, a 25-year Progressive veteran, was around when the Ohio-based insurer started experimenting with electronic ways to tie driver habits to insurance rates in the 1990s. He recently talked with the St. Petersburg Times about the Florida rollout in advance of a radio/TV ad campaign.
What's different about Snapshot?
It's changing the way one gets their auto insurance prices. What's new and different is actually using an individual's driving behavior to set their customized rate. It requires them sharing their driving data or allowing us to monitor their driving for certain periods of time to measure how they drive, the quality of their driving and when they drive … their propensity for having a loss. The one thing we don't measure with this new technology is where you're driving. It's not GPS-enabled.
How does it work?
It's a very small device that plugs into the diagnostic part of the vehicle. In most vehicles, that's right under the steering column. It allows you to access the computer in the car. We pull certain information (like) your speed per second. Not so much to figure out if you're speeding, but it allows us to look at total mileage as well as decelerating so we can calculate hard braking.
(The device) is also a wireless phone, so every time you turn it off, it sends the trip information to Progressive.
You can get (a customized discount) after you have the device for 30 days. You have to keep the device in the vehicle for the remainder of the policy period: six months. At that point, we ask for the device back.
In our terms and conditions, we reserve the right to come back to you depending on the amount of time or if we believe your particular risk has changed, and we want to monitor you again. That would be a minority of cases.
How much does the typical driver save?
The average cost savings is in the 10 to 15 percent range. The discount can go as high as 30 percent.
This has been a long time coming.
We started pursuing this seriously in the early 1990s, so we've been at this now 15-plus years. We've tested over the years several versions in other states. The reason you see it coming forth now is the ability and cost of technology has come way down. We started in late 2008 rolling it out nationally.
Why so long to get to Florida?
Florida, I believe, will be our 30th state. We started out in some relatively small states to see if it would work. For the larger states like Florida, we wanted to be sure we were at the point where it was production-ready.
Any customer reluctance to being tracked? Privacy concerns?
We have no way of knowing who is driving a vehicle. We know the time of operation, miles driven and propensity to hard brake. Our argument is you don't get involved in divorce proceedings. You don't know where the driver was and you don't know who was driving.
What if Snapshot shows a driver is making many sudden stops? Or driving a lot during times of the day common for accidents? Could their rates go up?
In the past, we have tested models where we surcharged you based on your driving, but the model we're rolling out is discount only. We did that primarily for consumer acceptance. People don't want to be penalized.
Aren't there similar products on the market?
Other major insurers are starting to build a similar product. Liberty Mutual has something in one or two states, as does Allstate. The one thing Progressive does have is a patent on this (device).
Latest rankings show Progressive is the fourth-largest auto insurer in Florida, not far behind GEICO. Will this get you to No. 3?
We think it will help us grow. This is so new and interesting it will talk to consumers in a way they haven't heard before in the auto industry. The question of how big it will get, we'll see. We think this is a chance for us to shine.