Our Driving Smarter Tips Can Save You Money on Auto Insurance Policies with Several Providers.
Car Insurance is Evolving
Car insurance policies have been similar for many decades – the insurance companies analyze the value of your car, likelihood of theft, accident rates in your area, number of miles driven, and your personal driving record. They use a formula to assess overall risk and set your premiums. Discounts for policies are usually based on having a clean driving record, low mileage, and multiple policies with the same provider.
However, in the recent years, a new way to save have emerged from insurance companies such as eSurance, Progressive, Liberty Mutual, and State Farm. While each company has a different name for its program, the programs are very similar – by installing a data logging device on your vehicle or using their app on your smartphone, the companies can monitor the way you drive, your speed, and your mileage. If you are a smart and careful driver, this approach could save you significantly on your insurance premium.
At first glance, you might be hesitant to allow companies access to your personal information. But if you have a smartphone, there is a good chance you have already agreed to allow companies to track your location and your habits.
The better question to ask then, is this product right for you? We took a hard look at the programs to help members of the Driving2Save community answer this question.
Getting Quotes and Comparing Sensor-Based Insurance Programs
In order to better understand the potential savings offered by these programs, we read through the fine print as well as obtained quotes for a fictional person. Here are the parameters for the fictional person (please understand that these are quotes that are not final, please contact the respective agencies with your Vehicle Identification Number (VIN) for tailored estimates):
- Male, 30 years old with no prior accidents or traffic violations
- Driving a 2010 Honda Civic LX Sedan that is paid off with 75,000 miles on it
- Person resides in Portland, OR 97205
- Person resides in Phoenix, AZ 85003 (for eSurance DriveSense)
- Bodily Inquiry & Property Damage Liability: $50k/$100k/$50k
- Uninsured motorist: $50k/$100k
- Medical payments: $1k
- No comprehensive or collision coverage
- Roadside assistance
- No multi-policy discounts
eSurance DriveSense (phone app and OBDII sensor)
- Timestamp for trip start and end
- Start location and end location
- Average speed in motion, maximum speed, distance, duration and idle time
- Miles driven at or above 80mph
- Count of events where events are included for braking, speeding, acceleration and cornering
- Counts of successive acceleration and deceleration
- Counts of excessive speed changes
- All parameters located here
- $828 for 6 months without DriveSense
- $767 for 6 months with DriveSense
eSurance offers the DriveSense program in Arkansas, Arizona, Idaho, Iowa, Illinois, Massachusetts, Nebraska, Rhode Island, South Dakota and Texas. Customers of the program will receive either a 5% or 10% enrollment discount depending on the residence location. Further discounts may be obtained if your driving behavior aligns with their parameters for a safe driver. However, your insurance rates may rise in the event that you are perceived as a high-risk driver.
Progressive with Snapshot (phone app or OBDII reader)
- Hard braking: decreasing speeds of 7 mph per second or greater is risky
- Amount of time driven: calculates the total number of minutes that your engine is running
- Time and day: driving between midnight and 4 am on weekends are deemed as high risk
- Fast starts: increasing in speed of 9 mph per second or greater is risky
- Trip regularity: the frequency with which you drive at the same time of day and same duration
- $305 for 6 months without Snapshot
- $292 for 6 months with Snapshot for smartphone
Progressive provides a $13 discount for enrolling in the program. Your actual discount will be shown after 6 months of monitoring and is advertised by Progressive to be as high as 30%. However, if your driving habits are not good, your rates could actually rise.
Liberty Mutual with RightTrack (windshield sensor)
- Number of miles driven
- The time of day you drive (low- versus high-risk times)
- Rapid acceleration and hard braking
Quote: $972 for 6 months
Liberty Mutual’s RightTrack system differs from Progressive’s Snapshot quite a bit. The company sends you a device that you stick on your windshield and is paired to your smartphone. After 90 days of driving, it will have determined how safe you are on the road using the parameters above and provide a savings of 5-30% on your policy accordingly. The best part? It appears that this discount will be applicable for the life of the policy, although we would encourage you to carefully read any fine print in an actual policy.
State Farm with Drive Safe & Save (App and OBDII sensor)
- Number of miles driven
- Rapid acceleration and hard braking
- $771.41 for 6 months without Drive Safe & Save
- $742.61 for 6 months with Drive Safe & Save
State Farm states that with their Drive Safe & Save program, drivers can save up to 50% on their insurance premiums. What is unique about the program is that it is available in more states (including California) and for people that do not have smartphones. If your vehicle has Onstar or SYNC (Chevrolet and Ford), you can use those systems to help track. For users in California, a photograph of your odometer is available for self-reporting purposes. State Farm indicates that if your actual mileage exceeds their low mileage threshold, this could cause you to lose this particular discount.
Does Driving2Save Help You Save on Car Insurance?
We have several Driving Smarter Tips that address the driving behaviors monitored by each of these insurance products:
- If You’re Not In A Rush, Don’t – Avoid hard acceleration and sharp braking
- If You’re Not Crusin, You’re Losin – Use your cruise control and avoid excessive speed changes
- Sharing is Caring – Carpool within a social network to reduce your mileage
- Give Your Engine a Rest – Don’t idle unnecessarily
- Know Before You Go – Check traffic and avoid higher risk environments; leave earlier or later if you are a commuter.
We also frequently write about the importance of recognizing the tradeoff between speed on the highway and fuel economy: For every 5 mph you drive over 55 mph, your fuel economy drops by roughly 7%.
If you follow our Driving2Save tips, you can actually save money on your car insurance under each of these products. Under Liberty Mutual, for example, you could save ~$300 every 6 months on your car insurance policy! With State Farm, you could potentially save even more.
As you can see, the programs have minor differences and premiums can vary. In addition, coverage and cost are only part of the calculus when picking an insurance company. Customer service matters quite a bit too.
To summarize the programs: eSurance’s DriveSense offers some upfront discounts but continuously monitor a large set of driving behaviors for additional discounts. Progressive offers low cost policies with savings up to 30% but they will continuously track your driving habits. Liberty Mutual is the least intrusive as they monitor your driving behavior for 90 days and provide up to 30% savings but this comes at the highest cost. Finally, State Farm offers the deepest potential discount while continuously tracking your driving behavior. It also offers the highest flexibility with Onstar/SYNC and self-reporting options.
In our view, if you are a consistently careful driver following our Driving2Save tips, we would strongly encourage you to get a quote from one or more of these providers (for enrolling in their monitoring program) and compare it to your current insurance premium (with respect to both the starting premium and the potentially discounted premium based on good driving). We believe there is a very good chance you could save several hundred dollars per year on insurance.