Smile and Say Surcharge!!

How many times have you prepared to enter your car, however right before getting into the vehicle you look underneath, and in the backseat, and around the perimeter, just to see if anyone is lurking around your vehicle, ready to attack you and separate you from your hard earned money? Well, from now on you might want to look in the glove compartment as well!

You may remember back in May of 2009, I wrote in this column about a new concept that some carriers were exploring, which was amorously nicknamed in this thing of ours, “Pay How You Drive”. Well, here we are almost two years later, and The Progressive Insurance Group through a program known as “Snapshot” has begun to offer certain selected New York customers auto insurance premium discounts, some as much as 30%, if they allow their driving habits to be closely monitored through the use of an electronically activated “black box”. This is only offered to select drivers who are also considered low accident risks.

Via the “Snapshot” program, drivers who purchase their coverage directly fromProgressive Advanced Insurance Co. will install a small, virtually undetectable monitoring device in their cars which will in turn record the total number of miles driven, the times of day that they drive, and whether they apply the brake frequently and abruptly. According to Progressive, higher mile customers and those who drive mostly at night, increase the risk of crashes. In addition, once again according to Progressive, frequently apply the brakes is a good indication of aggressive driving, which we all know may be deemed a poor insurance risk.

The black box will also detect the speed in which a vehicle is driven (it does not, however, record if you are exceeding the speed limit, or who is driving), how the driver accelerates, and how quickly the vehicle and driver negotiate turns. However, according to a source close to this program, the criteria is not used to determine a customer’s eligibility for the discounted coverage, as they base that on the number of miles driven, braking habits, and the time of day that they go out cruisin’.

In addition to Progressive, there are now a growing number of insurance carriers who have offered or whom are experimenting with another method that we talked about in 2009, called “Pay as you go”. This method of rating offers premium discounts for low-mileage drivers only, as certain carriers are employing electronic devices to monitor solely the mileage driven, and nothing else. GMAC Insurance Company, for example, uses the General Motors’ On Star communications system to record mileage for customers who sign up for the low-mileage discount program. So far even with many carriers vying for ways to outsmart their competition for the hugely profitable market share of low risk drivers, Progressive’s Snapshot program is one of the very few programs of this type that also records driver behavior in addition to mileage. One such carrier dabbling in this arena is Liberty Mutual, which has implemented a similar program to Progressive’s for commercial fleets only. However, there is now reported litigation involving an accused patent infringement between the two companies. The suit is pending at this time.

The New York State Insurance Department says that it believes Progressive’s Snapshot is the only program of its kind for private passenger car owners available in the state. Since its official inaugural offering very recently, Progressive said that about 100,000 car owners have signed up for the program in 27 states, including New York.

Drivers are told after the first 30 days of driving with the black box device if they are eligible or not for a discount. If so, the discount is applied immediately. However, since research accurately indicates that those who regularly speed cannot simply change their behavior in as little as 30 days, or “hide” it for that long a period of time, the device remains active within the vehicle, transmitting data for five more months before it’s returned to Progressive. Progressive then retains the right to have drivers periodically reinstall the device to get a current “Snapshot” of their continued driving habits. Progressive also states that customers can opt out of the program at any time and that rates can only go down – never up – as a result of their participation in this innovative. It also says that the Snapshot device cannot and does not track the location vehicle. Furthermore, program customers may log in to their policy at www.Progressive Agent.com to view their driving data and see how much they may potentially save. In other words it doesn’t care where you go, just how you get there. In July,The Philadelphia Inquirer reported that the city, along with Pennsylvania state officials, have raised privacy concerns about the program. As a result, Progressive suspended the program in that state. New York State’s Insurance Department has stated that the department didn’t consider the program intrusive because it is voluntary. Snapshot is also currently available through independent agents in the following states: Alabama, Colorado, Georgia, Kansas, Kentucky, Louisiana, Maryland, Minnesota, Missouri, New Jersey, Rhode Island and Texas. Progressive also promises that they will not share their customers’ data with third parties without their consent, unless required by law. Smile! Not too much going on lately since the holidays, however there are a few conferences coming up that we will be talking about soon, such as the PIA of NY Metro RAP Convention in Manhattan, NY; TheIIAANY Capitol Event in Albany, NY; and The ACT/AUGIE Conference in Tampa, FL. Stay tuned for a report on these events, and if you happen to be attending any of these please come over and say “Hi”. Around the neighborhood I did see some friends of ours at the NY Jets-Buffalo Bills game recently, like Christina Caputo from Beazley Agency;Mike Plafker from Member Brokerage in Queens, NY; and John and Anne Comeaufrom Excise Bond Company in Manhattan, NY. Also, welcome back to the FSC familyCharlie Schein, who is once again covering the New England area for FSC. If you are located in that area and are interested in any FSC products including the newly releasedFSC Sales Management System called “Pipeline” or the FSC Agency Management System, please give Charlie a call at 860-513-1055 or email him at charlie. schein@fscsolutions.com . Welcome back, Charlie! One more note…over the past couple of years I have shared some very personal and emotional moments with you through this column…this will be no different. Today I learned a very valuable lesson: never be afraid, or embarrassed, to say “I love you”. A very dear and long time friend of mine (also named Mike) desperately needed a kidney transplant, as his existing kidney function had been reduced to 9% of capacity. Understanding the severity of his situation, he had virtually accepted the fact that he was probably not long for this world, and I think that I, too, had accepted the fact that I may soon lose my friend. By the grace of God he received a kidney transplant two days ago, and I went to see him yesterday in the hospital. He was in the best spirits that I have seen him in years, teasing me about how he would now out live me (he being 10 years my senior), I kept my visit short, as he was still recovering and exhausted from his surgical ordeal. I told him I would speak with him tomorrow, and kissed him on top of his head. He squeezed my hand, and with a huge grin he said “I love you, Mikey.” I replied with a smile, “I love you too, Mike”, and immediately left his room feeling fantastic that my buddy will now be around for a very long time.

Eight hours later, Mike passed away from heart failure. Although we did not know this at the time, the last words we would share in our 32 year friendship were, “I love you.”

“So long, Pal…we’ll miss you.”