State Farm monitoring device can unlock auto insurance savings

Marcia Passos Duffy

Are you a safe driver? If you live in Illinois, State Farm has a deal that can save you money on your auto insurance: Install its “In-Drive” device in your car, and you can get discounts of up to 50 percent.

The new program — set to launch in September 2011 in Illinois and be rolled out to other states in 2012 — is one of a handful of “good driver” electronic tracking programs offered by auto insurers to help policyholders who have outstanding driving habits rack up savings on their car insurance.

Monitoring more than miles

State Farm’s “In-Drive” device will be available to auto insurance policyholders beginning in September 2011.

Unlike some pay-as-you-drive monitoring programs, State Farm’s In-Drive technology tracks much more than the miles you drive: It “watches” how safely you operate a vehicle to determine the discount you’ll earn.

The device, essentially a “little black box,” plugs into the computer system of your car, says Missy Lundberg, a spokeswoman for State Farm, the country’s largest auto insurer.

“Once that is plugged it, it tracks the odometer and driving habits including speed, the way you do turns, accelerating and braking habits,” she says.

The data that’s collected determines a driver’s discount. “The In-Drive program doesn’t figure out your insurance rate, only the discount,” Lundberg says.

Lundberg notes that In-Drive differs from the company’s “Drive Safe & Save” program, which uses an OnStar device to monitor mileage only.

State Farm policyholders who want to try In-Drive get an automatic 10 percent discount on their auto insurance premium for simply testing the program for six months.

“If you’re an excellent driver, the savings could be huge,” Lundberg says.

The In-Drive system not only tracks your driving behavior but also provides tips on improving driving habits to get a bigger discount. Families with teen drivers can opt for text alerts that inform them when a car goes above a certain speed or whether the car is going outside a certain area.

While the basic service is free, there is a one-time $10 activation fee. Monthly fees ranging from $5 to $14.99 will apply if you want more features such as roadside assistance, stolen-vehicle alert, one-touch emergency response, and vehicle diagnostic alerts and maintenance reminders.

Other monitoring programs

Progressive offers a similar good driver program called “Snapshot,” which is available in 37 states and Washington, D.C.; it also monitors driver behavior and mileage through a plug-in device. Progressive policyholders can find out whether they’re eligible for a discount after 30 days of use based on a “snapshot” of their driving habits.

Progressive says drivers who participate in Snapshot save, on average, $150 a year on their auto insurance.

“Snapshot is best for people who drive less, in safer ways and during safer times of the day,” Progressive spokeswoman Brittany Senary says.

The device doesn’t have a GPS so it can’t track your car’s location.

More than a dozen auto insurance providers offer some form of discount based on mileage monitoring, according to the Insurance Information Institute. These pay-as-you-drive and good-driver programs have not swept across the country more quickly because they first must be approved by insurance regulators in each state, says Michael Barry, a spokesman for the Insurance Information Institute, a consumer education organization.

“It won’t become clear for years if these services will become popular on a national level,” Barry says.

Is your privacy in danger?

These driver-monitoring programs do provide benefits, but they also raise privacy concerns.

Although these programs are voluntary — and insurance companies stress that the data collected is confidential — Paul Stephens, director of policy and advocacy at the nonprofit Privacy Rights Clearinghouse, warns this type of data can be subject to disclosure in response to a law enforcement request.

“You have to remember that information is being retained on you,” Stephens says. “It can be starting out as benign information, but there is always the possibility that the information can be used by ways not anticipated by the driver.”