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New technology provides detailed info on driving habits
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Chuck Samuelson, with the MCLU, says he's worried the Progresive program is part of a new trend. (Tom Scheck/MPR)
One of the nation's largest car insurance companies says it wants to ride shotgun -- at least virtually -- with 5,000 willing participants. Ohio-based Progressive Insurance plans to analyze drivers' habits by installing a device in volunteers cars for collecting that data. Progressive officials say more data means lower rates for safe drivers. But privacy advocates worry the data could make its way into the wrong hands.

St. Paul, Minn. — Insurance has always been about evaluating risk and putting a price on it. Jim Haas is the Minnesota auto insurance manager for Progressive.

"We know folks who drive fewer miles are safer," Haas said. He says insurers like Progressive typically assess a driver's risk by asking questions about their driving habits. The questions tend to be general, like how far do you drive to work each day?"

"It makes sense," Haas said. If you're on the road, there's some chance of an accident. If you're on the road less, there's less chance of an accident. And we've seen that in the numbers.

Haas says insurers typically have to trust that an applicant gives them accurate and truthful numbers. The device Progressive is testing would help the company gather more specific information. The big question is whether drivers will give up information on their personal driving habits. Haas says Progressive believes drivers will if they can save money on their car insurance.

"This gives us information that is much more specific to the individual so we can tailor the rate to them," Haas said. "Maybe you are a 17 year old who has already had two accidents, however maybe the data on the device can show that's true but these other behaviors that aren't captured normally in normal insurance rating demonstrate that there's something that makes you safer than the average 17 year old."

Haas says every customer who's willing to share the data will receive a five percent discount. Additional discounts of up to 25 percent can be earned depending on driving patterns. Discounts will be given to people who don't speed, drive less than the average motorist and stay off the roads at risky driving times.

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Image Adam Gordon

Adam Gordon believes he'd benefit from such a policy. The 40-year-old St. Paul resident says he's frustrated that he pays too much for his car insurance. He's willing to share his driving information in exchange for lower rates.

"The thing that's really interesting and attractive to me about this program is the fact that up until now, the bill comes in the mail, I pay my insurance and off it goes," Gordon said. "In 20 years, I have never had an accident, never had a speeding ticket or anything like that and yet my rates keep going up. Now, I actually have a way of differentiating myself from that huge pool of drivers."

Gordon says he intends to enroll in the relatively small pilot project. In fact, he participated in a program a few months ago to see if the device would actually work.

Digging under the dashboard of his 2000 Acura Integra, Gordon points to a the computer port on the passenger side of his Acura Integra. Every car made after 1996 has such a port.

Progressive officials sent Gordon a device about the size of a deck of cards that he plugged into that port. Once plugged in it immediately records whether or not the car is on and if so, what speed it's going.

"You can see it's like a serial port on a regular computer and the box will go into that. It just clicks right in there..."

"This gives us information that is much more specific to the individual so we can tailor the rate to them."
- Jim Haas with Progressive

After a month, Gordon removed the device and hooked it up to his home computer. The device spits out his driving information. Gordon could compare his driving habits with Progressive's standards of a good driver.

Progressive officials say consumers can decide if they want to share the data with the company. But they say drivers who decide against uploading the data won't receive a discount.

Company officials say they won't share the driver data with any outside party.

But Chuck Samuelson, with the Minnesota Civil Liberties Union, worries that the project is part of a new trend. He says there's nothing illegal about Progressive's program. But Samuelson worries that police, attorneys or marketing companies could eventually gain access to that data.

"In addition to getting this information for their purposes, they will then have this information, Samuelson said. "It will no longer be yours. It belongs to them. Your private data ceases to be yours once you give it to someone else, whatever that data is."

Samuelson says he's also concerned that every other insurance company will develop similar programs. David Snyder with the American Insurance Association in Washington says Progressive's program is a good example of the competitive nature of the insurance industry. He says some insurers are a bit reluctant to reproduce Progressive's program because of privacy concerns.

"We're interested in determining whether the public will really make the tradeoff between lower premiums and this constant monitoring by insurers," Snyder said. "We're skeptical of that but interested to see how that will turn out."

Snyder says it's possible that other insurers will develop similar programs if Progressive is successful in attracting good drivers. Progressive officials say they hope to expand the program if the pilot project is successful.

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