Aldora Cureton, a 46-year-old home day care operator from Belair-Edison, signed up for Progressive's program for her Ford Explorer about a month ago. She hopes to lower her $187 monthly premium.
"I drive at the speed limit, even though there are so many fast drivers trying to get you to drive faster," Cureton said. "You have to watch the crazy drivers out there. I'm cautious, and I hope this will help me to save money on my insurance."
Progressive's program is the first offered to Maryland drivers, said state insurance commissioner Ralph S. Tyler, who approved it. None of Maryland's biggest insurance companies - Geico, State Farm, Allstate or Nationwide - has moved to offer a pay-as-you drive option, he said. Pay-as-you-drive types of insurance could gain traction in the coming years, because the benefits also appeal to policy-makers, said Jason E. Bordoff, policy director for the Hamilton Project at the Brookings Institution.
Brookings research shows that pay-as-you-drive options could save two-thirds of drivers money on their auto insurance. Drivers would save, on average, about $270 per vehicle annually.
"Now ... the high-mileage drivers are subsidized by the low-mileage drivers," Bordoff said.
And incentives to reduce driving will lead to reduced oil consumption, greenhouse gas emissions, road congestion and accidents, his research showed.
"This is starting to come into the mainstream," said Michael Replogle, transportation director for the Environmental Defense Fund. "It can provide a way for motorists to basically drive in a greener way and save money at the same time by driving fewer miles and by driving more calmly."
But some worry that electronic devices in cars could invade privacy in ways that drivers may not even realize.
Barry Steinhardt, director of the ACLU's technology and liberty program in Washington, said that no laws exist to prevent police or others from accessing such data. The ACLU does not oppose the technology, but its leaders think that the U.S. needs overarching privacy laws.
"Basically, we're paying people to give up their privacy," Steinhardt said. "We should have rules that say data that's collected for one purpose cannot be used for another purpose.
"We have the capability to track individuals - not only how fast they're driving, but when they're driving and where they're driving, and that's frightening," he said. "We are on the cusp of creating a surveillance society where our every action, our every movement is going to be tracked. This just brings us one step closer."
Progressive officials say their program does not track a driver's location or where they travel. But GMAC Insurance last year began offering discounts on premiums to OnStar subscribers who allow the insurer to track their odometer readings. California's insurance commissioner recently proposed regulatory changes that would open the door for usage-based insurance programs. But the commissioner has said he will not approve programs that give a driver's location through tracking devices.
