USAA gains license for usage-based insurance patent

USAA entered a license agreement with Progressive Insurance for intellectual property related to usage-based car insurance programs, also known as pay-how-you-drive or mile-based insurance.

Progressive holds six patents in the U.S. for usage-based insurance, or UBI, with more than 1 million current users, according to a news release.

As a licensee, San Antonio-based USAA will not be able to base its insurance rates on its customers' driving habits before April 1, 2015, the release reads. The license allows Progressive to collect annual royalties based on USAA's direct written premiums.

Payment will begin with usage on or after April 2015, according to the release.