Allstate Usage-Based Auto Insurance


Today the Hartford told industry analysts they are launching TrueLane usage-based insurance early next year.   Their head of consumer insurance Andy Napoli said it will measure how well customers drive, but did not say whether it will initially base discounts on driving behavior.

Several other insurers launched usage-based products that collect driving-behavior data but at first only offered discounts based on mileage.   In those launches, the driving behavior data are likely used to develop discount algorithms to offer behavior-based discounts in future versions.  Two products seeming to take that approach are Travelers IntelliDrive available in Illinois, Ohio, Oregon, and Virginia, and AAA NCNU uDrive in Nevada.

If TrueLane does provide discounts based on driving behavior, then it will be the fifth  insurance of that type in the U.S. market.  The pioneer was Progressive, whose SnapShot is now available in 39 states and DC.  The others are: Liberty Mutual Safeco unit’s Rewind offered in Colorado; Allstate’s DriveWise available in Illinois, Arizona, and Ohio; and State Farm’s Drive Safe & Save in Illinois.  (State Farm offers Drive Safe & Save in other states, but only in Illinois does it base discounts on driving behavior so far.)

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Today Allstate introduced Drive Wise®, their usage-based auto insurance that seems designed to compete with Progressive’s Snapshot℠.   Details can be found in their press release here: http://www.allstatenewsroom.com/releases/safest-illinois-drivers-save-with-new-allstate-drive-wise .

Here is how these two innovative auto insurance products are similar:

  • The policy holder attaches a wireless unit to a 1996 or newer vehicle’s under-dash connector to transmit driving data to the insurer
  • The product is “behavior based”, meaning the insurer monitors when and how the vehicle is driven (but not where), in addition to how much
  • The consumer only learns the amount of discount after signing up for the policy, driving data are transmitted, and the insurer evaluates it

These are their differences:

  • Allstate’s Drive Wise is only available in Illinois, but planned for more states early next year.  Progressive’s Snapshot is already in 25 states.
  • Drive Wise offers a maximum 30% discount.  Snapshot’s maximum discount varies somewhat by state, but is also 30% in some states.
  • Drive Wise offers an immediate 10% discount, and substitutes the earned discount of up to 30% later, based on miles driven and a calculated driving score.  Snapshot usually (but not yet in every state) starts its earned discount after 30 days of driving.
  • Drive Wise likely requires its device to remain attached to keep earning discounts.  Snapshot usually (but once again, not yet in every state) can be returned after the first 6-month policy, and a renewal discount based on the six months driving will be applied to the renewal policy.

All usage-based auto insurance will offer consumers who drive less than average a way to save money.  Plus, behavior-based policies like Snapshot and Drive Wise can save lower-risk drivers even more.