Driving behavior has more than twice the power to predict auto insurance losses than any other insurance rating factor, according to new research from Progressive.
Loss costs for drivers with the highest-risk driving behavior are about 2.5 times the costs for drivers with the lowest-risk behavior, the company's research found. The results come from an analysis of 5 billion driving miles.
"It's a case where the data confirms everyone's intuition," Progressive President and CEO Glenn Renwick said in a press statement. "We believed that driving behavior was the most predictive rating factor -- but didn't expect the difference to be this dramatic."
The study also found that 70 percent of drivers who tried Snapshot, the company's usage-based insurance program, qualified for a discount, which can be up to 30 percent for the lowest-risk drivers.
Progressive has been collecting and analyzing real-time driving data for 15 years, and the number of miles it has analyzed has more than doubled in the last 18 months since the launch of Snapshot. Snapshot is available in 42 states and the District of Columbia.
Customers who participate in the program receive a small device that plugs into their cars and records key driving behaviors, such as miles driven, the frequency of hard braking, and time of day of driving. That data is used to determine whether they qualify for discounts.
Over the past few years, almost a million customers have tried usage-based insurance through Progressive, and customers have saved an average of $150 a year, according to the company.
The company is now offering a free test drive of the Snapshot program to all drivers, not just Progressive customers.
After signing up and plugging the telematics device into their cars, drivers can log into an online Snapshot page to track their driving habits and potential car insurance discounts. After 30 days, they get a car insurance quote from Progressive, which includes a potential discount based on their actual driving behavior. They can then stay with their current insurance carrier or switch to Progressive.
Other companies have also rolled out usage-based insurance programs in the last couple of years, including State Farm, GMAC, American Family Insurance, Allstate and the Automobile Club of Southern California. Not all the programs are available in every state.