Progressive Snapshot: Everything You Need to KnowMay 09, 2014
Progressive Snapshot is the branded name for a wider range of in-car devices being used by insurance companies. Called “telematics”, these devices are a new way for auto insurance companies to charge drivers monthly premiums more accurately based on your individual driving style, rather than aggregated data about whatever demographic you happen to fall into.
Of course, taking a device that records data about you and transmits that data to a large corporate entity comes with some concerns—not the least of which is privacy. How does the Progressive Snapshot program deal with the concerns? How does the device even work? There’s a lot to learn about auto insurance telematics devices, but we’ve researched the finer points to bring you the information you need to know in this simple guide.
A Quick Guide to the Progressive Snapshot
Technology can be confusing and telematics devices such as the Snapshot aren’t an exception. While you may not be concerned with how the device works, it’s important to know what to look for in the fine print because these days most technology takes information about you and passes that information to someone else.
It’s also worth talking a bit about how the Progressive Snapshot program works in order for you to determine whether it’s something that might benefit you.
How Progressive Snapshot Works
When you get a quote for car insurance, the auto insurance companies take data you provide and then look at how you compare to other drivers with similar data (If you’re a single male living in L.A. driving a BMW, what does the data from other, similar drivers tell them about the risk you pose as a potential client?) to determine your annual rates. Snapshot takes a more scientific, more personal approach.
Drivers who sign up for the Progressive Snapshot program attach a device to their car’s computer. It’s small and out-of-the-way. The device records the time of day, whether or not your car is on, and how fast you are travelling. These metrics get reported to Progressive and are used to determine how much they will charge you for auto insurance coverage. The device also records GPS data and your car’s VIN number. These aren’t used to determine your rate, but according to Progressive’s privacy statement for the device, they are used for research and development purposes. Drivers who use the device will also have access to these reports via the Progressive Auto Insurance website.
Progressive Snapshot and Your Privacy
It’s a Process
Unfortunately, you don’t get a cheaper rate right away. The Progressive Snapshot is part of a process. You attach the device to your car and drive around with the device for 30 days before Progressive takes a look at the data and provides you with a personalized rate based on information collected from the device. Depending on your driving habits, you also run the risk of not qualifying for the discount. Progressive says that they won’t charge you more based on your driving habits, but drivers who don’t prove to be safer than the average driver will be unable to get the discount.
According to Progressive Auto Insurance, 70% of drivers who used Snapshot saved an average of $150 per year on their auto insurance coverage. The maximum discount Progressive offers is 30%.
What the Progressive Snapshot means for the Future of Car Insurance
At its simplest, auto insurance is about risk. An auto insurance company charges you according to the amount of financial risk you pose to them based on a set of highly researched and remarkably reliable data. This means that drivers who drive safely and don’t frequently file claims can pay lower rates.
On the other hand, it could complicate the future of some insurance companies. Auto insurance companies rely on a “pool” of risk. Generally speaking, of all the people auto insurance companies insure, they must maintain a balance. It’s feasible to insure bad drivers as long as you also cover good drivers. The regular influx of good drivers’ payments helps to balance out the costs associated with insuring the bad drivers and drivers who frequently file claims. Really, the secret to maintaining a successful business in the insurance world is to keep these margins reasonably wide. By reducing how much good customers pay you cause that margin to narrow, which can be risky. But for now, the Snapshot just isn’t being used widely enough to cause such concerns.
You Don’t Need a Device to Save Money on Auto Insurance
A study conducted by financial reporting website NerdWallet.com found that most drivers are overpaying for car insurance because they don’t compare rates and they aren’t applying for discounts that are available to them. The amount that most drivers could save by doing these things happens to be about 32%. That’s roughly the same amount that Progressive says you could save by using their device. So you could get the same savings by simply comparing rates.
Don’t keep overpaying for auto insurance. Get multiple quotes for car insurance right here, right now– for free.