One of the biggest changes we should expect to see in the car insurance industry stems from a recent announcement made by Allstate. On October 8th, 2012, Allstate revealed its Drive Wise program will be available in four new states, New York, New Jersey, Colorado and Michigan. In addition to these 3 states, Allstate also announced the Drive Wise program will be available in 3 other states. Why do these changes signal a change taking place?
Technology is impacting our daily lives in many ways. From our smartphones, to our televisions, to other smart devices we are seeing some significant changes technology is bringing. We also see similar changes in the cars we drive. Car insurance organizations are able to place devices in our vehicles or to use features placed in our cars. An example is the Onstar system, where a tracking system is built within the vehicle and displays our driving patterns more clearly. This technology, whether built in our cars or added via a tracking device, is bringing some big changes to the auto insurance industry.
The driver of the change is the extra data the technology is able to help generate. Examples of this data relate to showing the times of the day we typically drive, how frequently we brake, where we maybe accessing speed limits and how many miles we drive on a daily basis. All of this valuable information translates to the type of risk we carry as drivers. This becomes a big win for insurance companies as they can more effectively measure risk and price polices accordingly. This is also an advantage for the consumer as pricing should be fairer based on their driving patterns and how often their car is driven.
Allstate recent moves will soon have Drive Wise being available in 13 states. Progressive is the leader in usage based programs with their Snapshot available in over 40 states. Other companies, such as State Farm and GMAC also have programs. For the consumer looking to save money on car insurance premiums, a usage based program is a great way to go. Mileage reduction alone can save up to 50% by driving fewer miles.
To take advantage of usage based programs, click on our interactive map to see the programs available where you live. We likely will continue to see new companies and more programs that leverage technology. Being able to understand how to benefit from the technology will go far in saving money on premiums. It will also help in making us more conscious of our driving patterns and how they translate into how much we pay.