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Here's what it does. You plug it into your car's OBD II connector, which is generally by your feet on the driver side. The device then tracks data on how you drive your car. There is no GPS, so your insurance company doesn't know where you are going, but they can find out things like # of trips per day, # of miles per day, # of sudden starts or starts, and the times you are driving. If you don't drive a lot, drive carefully, and don't dive a lot during "high risk" times like after midnight, you could save up to 25% on your car insurance. And the device is small, doesn't get in your way and it looks like it sends that data back to Progressive on its own. And you also get a driving report that shows how you're doing (sample below).
But what Progressive doesn't tell you if how much your insurance could go up if you have poor driving habits. Maybe they don't penalize you? Maybe since you start off with a higher rate, they can afford to give discounts without having to raise rates based on driving habits. After all, if they assume you're a bad driver, it could only get better, right? I don't know the answer to that...
But what is interesting is how insurance companies are using technology to assess their risk on a car by car basis. At what point will this become the standard and not just an innovative option?
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