Would you let an insurance company scrutinize your driving habits - and whether you speed on the Beltway - if you could save money on premiums?
Innovative "pay-as-you-drive" programs now offered in Maryland are being touted as a way to equalize premiums, lower costs for safe drivers and get people to drive less. The programs use electronic or other measurement devices to record mileage patterns, as well as when and how drivers use their vehicles - and charge premiums based on those habits.
"On its face, this is probably one of the most revolutionary ways to price insurance in this country," said state Sen. Lisa Gladden, a Baltimore Democrat who has been a proponent of pay-as-you-drive insurance in Maryland. "Why should my insurance rates be as high as the two-time drunk driver or the guy who speeds?"
But critics such as the American Civil Liberties Union say the electronic monitoring raises privacy questions and may be too intrusive. And such programs could boost insurance costs for people who put on a lot of miles or drive aggressively.
Until now, most programs were limited to pilot efforts by small companies, but a handful of larger insurers have started to offer them.
Progressive, for example, is rolling out a pay-as-you-drive program using technology that tracks mileage, the time of day a car is used and driving behavior such as abrupt braking or fast speeds. So far, Progressive offers the program in six states, including Maryland.
"Drivers who don't use their vehicles that much or are safe drivers deserve a benefit for that," said J.C. Jones, a product manager for Progressive.
Policyholders plug a wireless device into a port under their steering wheel column - something available in models built in 1996 or later. The device, which costs $30, sends information to Progressive, recording time of day, miles driven and speed.
Customers who want to shape habits to reduce premiums can check their driving data on a password-protected Web site. The company declined to detail how many people have signed up for the program, which began this year.
Customers receive a score based on patterns of behavior over time. At the end of six months, their insurance premium could fall by as much as 40 percent, Jones said. But drivers who put excessive mileage on their cars, drive often at riskier times, such as after midnight, or make a habit of braking hard or accelerating quickly could find premiums rising, he said.
