06/27/2013

Progressive Insurance is airing an extensive ad campaign promoting its Snapshot device, promoting it as a way to cut your auto insurance bills. It sounds good, but it might not work out for everyone.

The humorous commercials warn of “rate suckers,” those bad drivers who get speeding tickets, get into accidents, and cut you off on the freeway. The commercials point out those bad drivers are why your insurance rates are so high.

But essentially, that's how insurance works. Some people are good drivers, others aren't. Companies take the complete risk pool into account when assigning auto insurance rates. It's worked like that for years.

Separating the good from the bad

Progressive's Snapshot program seeks to separate the good drivers from the bad, rewarding the former and punishing the latter. To participate you attach the Snapshot device to the computer in your car, which collects data about your driving habits.

According to Progressive, the device records your vehicle identification number (VIN), how many miles you drive each day and how often you drive between between midnight and 4 a.m. While it doesn't record your speed, it does make note when you slam on the brakes.

After driving with Snapshot for 30 days, you return it to Progressive and, depending on your driving habits, the company says you can get a discount up to 30%. Katie, from Philadelphia, says she got a 28% discount and is featured in a promotional video on the Progressive website.

Not much driving

If you watch the video you will note that Katie lives in a city neighborhood and walks to work. In her video, she says she only drives her car once a week. Insurance companies absolutely love customers like Katie.

But in reality, most drivers are not like Katie. The commercials say that if you are a good driver, you can get a discount. Is there anyone who doesn't think they are a good driver? We've heard from some consumers who say they tried Snapshot and were disappointed in the outcome.

“What they don't tell you is at the end of your snapshot period, if they see fit, they will reevaluate your driving history and raise your premium,” Danya, of Virginia Beach, Va., wrote in a ConsumerAffairs post.

That's true. Depending on what the data from Snapshot reveals, your rates can, in fact, go up.

Two tickets but no rate hike

“I had Progressive for 12 years and they never raised my rate,” Danya writes. “I literally had two tickets in one year a few years back and they never raised my premium until two days after I returned my Snapshot.”

An anonymous poster reported the same results. When they installed the Snapshot on their child's vehicle, they say the rates went up. Jamie, of Milwaukee, says he considers himself a good driver but his commute to work placed him at a severe disadvantage.

“My commute daily was around 20 miles, round trip,” he writes. “My acceleration from stops to go were good and braking was so-so, per Snapshot at the beginning. There where a few days when I had drivers jump in front or cause me, causing me to brake hard, so there must have been deductions based on that reason.”

Make an honest assessment

Keep in mind that what an insurance company considers a safe driver and what you consider a safe driver are not necessarily the same thing. It's not just a matter of avoiding tickets and accidents. Progressive's idea of a safe driver is the only one that matters here.

Before plugging a data collection device into your car and turning it over to your insurance company, it's best to honestly consider when, how and how far you drive your vehicle. If you don't meet Progressive's idea of a safe driver, that discount could be elusive.