Jill Overmyer

Progressive Insurance has launched a program in New York that it claims could save drivers up to 30 percent on their auto insurance costs each month.

Already available in 27 states as of December 2010, the Snapshot program bases customers' insurance rates on how many miles they drive as well as their driving habits. The program is similar to pay-as-you-drive insurance programs, which allow those who drive fewer miles to pay less for insurance. However, Progressive's program also uses a special device that records drivers' habits, which helps determine their overall risk.

How does Progressive's Snapshot insurance work?

The Snapshot program works like this:

  • The program is voluntary. Drivers sign up, and Progressive sends them a small device that tracks information like how often the customer drives, the time of the day the car is used, and driving behavior like slamming on brakes or suddenly increasing speed. The device does not have a GPS, so it doesn't track the driver's location.
  • After 30 days, Progressive will notify drivers if they're eligible for insurance discounts (up to 30 percent). Drivers who have safer habits or who don't drive at high-risk times like rush hour will see the biggest discounts.
  • The policy lasts for six months. After that, the device is returned and a new renewal rate is calculated.

Is Snapshot right for me?

Snapshot could offer savings on your auto insurance if:

  • You don't drive that often. If you don't have a daily commute, if you carpool to work or if you use your car primarily to run errands around town, you're at a lower risk of being in an accident than a driver who drives more or during high-risk times.
  • You're a safe driver. Because Snapshot takes your driving habits into consideration, if you don't get tickets and you obey the speed limit and drive safely overall, the Snapshot program could be beneficial.
  • You are considering cutting down on your driving. A 30 percent discount is significant. The program could motivate those who want to save money to drive fewer miles.

Where are pay-as-you-drive programs available?

Traditional pay-as-you drive programs might be a good option for those who use fewer miles than most but would rather not have their driving habits tracked. Pay-as-you-drive programs are available throughout the country. For example, the MileMeter program in Texas offers discounted rates by charging drivers for the actual miles they drive. Drivers purchase miles in advance, so if you park your car for a week, you will delay your next payment. In California, pay-as-you-drive insurance programs have been approved for State Farm and the Automobile Club of Southern California.