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Thems the brakes: Is pay-as-you-drive insurance worth the hassle?

personal pay as you drive experience When I first heard about pay-as-you-drive auto insurance, it sounded like a heaven-sent way to save -- especially for an incurable tightwad like me.

This type of coverage -- more commonly known as PAYD insurance -- promises dramatically lower insurance premiums to policyholders who meet certain conditions, such as:

  • Driving fewer miles than average.
  • Staying off the roads late at night.
  • Avoiding braking hard and often.

A few years ago, I signed up for one of the very first of these PAYD programs, Progressive's Snapshot.

In the first couple of months after I joined, the benefits of Snapshot appeared a little fuzzy. But over time, the savings picture has come into clearer focus.

The honeymoon period

Initially, Snapshot seemed simple enough. Soon after I signed up, Progressive sent a little device known as a dongle that I popped into my car's diagnostic port. At that point, the company began monitoring my driving habits 24/7.

This Big Brother quality makes many people nervous about PAYD insurance. And in fact, Progressive does say that in some states, the company will place a surcharge on policyholders who drive aggressively unless they opt out of the program within the first 45 days of enrolling.

However, Progressive never raised my rates – despite the fact that my driving behavior was less than perfect – and the company has done nothing to violate my trust during the years I have been in Snapshot.  

Once I began driving around with the dongle, I figured a sharp cut in my insurance rate was a shoo-in.

I recently had taken a job where I worked from home, so I was logging fewer than 50 miles a week in my car. Progressive told me a price break was most likely if I drove fewer than 30 miles a day, so I knew I was a strong candidate for the low-mileage discount.

Also, I had recently turned 40, and my bar-hopping nights were a distant memory. I expected to rack up more savings by not driving between midnight and 4 a.m.

A bump in the road

After one month with Snapshot, I received notice that my initial discount would be a paltry 1 percent.

Stunned -- and more than a little angry -- I called Progressive and learned that the dongle showed I was doing fine, with one glaring exception: I was braking too hard at stop signs and lights, and in traffic.

The representative told me a "hard brake" is any decrease in speed of 7 mph per second or greater. And, he explained, I was guilty of doing that. A lot.

But all hope was not lost. The representative said my rate could continue to fall during the monitoring period if my driving behavior improved.

He suggested I log into my online Snapshot account after every driving trip and see how many hard-brake infractions I had committed.

I followed his suggestion. As I became more conscious of my hard brakes and began to correct them, the discount gradually began to creep higher -- from 2 percent to 4 percent, and then even higher.

Tough brakes

This all sounds great, but in truth it was a mighty struggle. Trying to brake more softly and smoothly is a lot tougher than it might seem.

With the aim of wringing every last nickel of potential savings out of Snapshot, I became paranoid about ever making a hard brake.

Even if a car stopped short in front of me, I would do my best to finesse the braking so I hit the sweet spot -- not braking hard enough to trigger a "hard brake," while also slowing down in enough time to avoid rear-ending the car in front of me.

I also could feel my anxiety level rising as I approached a stoplight. Would it turn from green to yellow at any moment? And when it did, could I stop in time without braking too hard? 

After a while, I began to fear that Snapshot was making me a more dangerous driver.

But as the days and weeks rolled on, I adjusted to this new style of driving. I never became fully comfortable with it, but it did get easier.

Is pay-as-you-drive insurance worth it?

It helped that I only had to maintain this style of driving for a relatively short period of time. One of the beauties of Snapshot is that unlike some other PAYD programs, the monitoring is not continuous.

After several months, Snapshot informed me that the monitoring period was over and I returned the dongle.

My final discount with Snapshot: 16 percent.

I was pleased to see the discount climb so much higher over time. Still, a few months after enrolling in Snapshot, I was still so perturbed about having to adjust my braking style that I was telling people it wasn't worth the bother.

Several years later -- and after receiving the discount all that time -- I have changed my tune. I recently got a rate quote from another major insurer. The six-month premium I was quoted was nearly double what I pay with Progressive.

I can't give all the credit for that price difference to Snapshot. But at the end of the day, I now believe my enrollment in Snapshot has been worth it, even if the program isn't picture-perfect. 

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