How pay-as-you-drive car insurance turned me into a wreck
(Editor's note: This post is by guest blogger Chris Kissell.)
I'm a born cheapskate. So, when I heard about Progressive's Snapshot program, it sounded like car insurance nirvana.
Snapshot is among the so-called "pay as you go" systems that insurance companies now use to price policies based on how often you drive. Drivers who enroll in Snapshot can save up to 30 percent on auto insurance rates by observing a few simple rules:
- Driving fewer miles than average.
- Staying off the roads during hours when accidents are most likely.
- Not braking too hard. (MUCH more on this last item to follow.)
When I joined Snapshot, dreams of big auto insurance savings danced in my frugal head. But six months later, a "snapshot" of this driver would reveal someone who is confused, disappointed and not sure the reward was worth the effort.
Bumpy road to savings
The setup was simple enough. Progressive sent me the little Snapshot device and told me to install it into my car's diagnostic port. (Most vehicles with a model year of 1996 or later have such a port. So chances are good that you are eligible for the program.)
Although I had some trouble figuring out exactly where the device plugs in – a shout-out to the AutoZone employee who helped me out with this – once I located the spot, I was good to go.
For the next few weeks, I drove around blissfully imagining the big savings I was racking up. Because I work from home, I only average about 50 miles weekly on the roads – or about 2,500 miles a year. That's just a fraction of the 18,000-plus mile total for the average male driver my age, according to the Federal Highway Administration.
Also, I never drive between midnight and 4 a.m., the hours Progressive deems verboten for those hoping to collect the biggest price break.
So, imagine my surprise when after 30 days, I received my initial discount: a whopping 1 percent.
More than a little perturbed, I called up Progressive's customer service department and registered my complaint. How on earth could my discount be so low?
"It's because you're braking too hard," I was told.
Those are the 'brakes,' kid
This made no sense. I'm driving simple South Florida side streets, not trying to dodge crazies on an L.A. freeway.
That's when the representative explained Progressive's definition of a "hard brake": A decrease in speed of 7 mph per second or greater. He went on to reveal that a particularly "hard" stop could result in multiple hard brakes being recorded for that single incident.
The representative told me I could monitor my hard brakes on the company's website. Sure enough, I was braking harder than a plate-glass window dropped from a fifth-floor balcony. On one 14-mile journey, I was dinged 11 times.
Determined to get my discount, I shifted tactics. Always a cautious driver – friends and family have groused that I'm a little too prudent, in fact – I slowed down even more.
And it worked. In no time, my hard-braking dropped dramatically. Gradually, my discount increased – about 2 percent a week.
But as the number of hard brakes fell, my anxiety level began to soar.
Safety in reverse
You see, when you are conscious of hard-braking, you overcompensate – particularly when a little extra cash is on the line.
So, instead of slowing down sharply at yellow lights, I tried to gun my way through them. When traffic stopped suddenly in front of me, I avoided a hard brake by coasting right up to the bumper of the car in front of me – whatever it took to squeeze out a few extra seconds of braking time and avoid the dreaded Snapshot penalty.
Each time I returned home from a trip, I checked my hard-braking status. Occasionally, I would record a big goose egg. What a thrill!
But more often, I would have at least one, two or three hard brakes. I would replay the most recent journey back in my head, but could not remember a single incident that would meet the "hard brake" criteria.
So, the next time out, I'd try a little harder. Maybe it would be better to coast into that right-hand turn rather than braking at the corner. Perhaps I could avoid a hard brake by slowing way, waaaay down in anticipation that the light ahead of me might change.
It soon realized that contrary to making me a safer driver, Snapshot was actually increasing my risk of an accident.
The final verdict on Snapshot car insurance
Now, I guess it ended well for me. After about four months, Progressive told me the period of monitoring was over. I now will receive a 16 percent discount on my car insurance rates going forward.
But in all honesty, if I was told I had to start over tomorrow, I'd simply say "no thanks." Even a hall-of-fame miser like me has limits. Adhering to Snapshot's definition of a hard brake strikes me as unrealistic for drivers forced to react to the unpredictability of the world around them.
So, I can't give the good folks at Progressive a "thumbs up" on this one. There are many good ways to save on car insurance. But in my opinion, Snapshot is not one of them.
Des Toups is a writer, editor and expert on insurance, cars and personal finance. He has written extensively about all three for national publications such as MSN and major newspapers such as the Seattle Times. He has been quoted about insurance issues in The New York Times, USA Today and Kiplinger's. Follow him on Twitter @destoups.