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| Grewal Law, PLLC

You’re probably familiar with Flo, the perky but slightly annoying spokeswoman for Progressive Insurance. Recently, Flo has been advertising the "safe driver device", which links driver habits to their insurer. The device can save you big bucks on your car insurance premium–up to 30%, which equates into hundreds of a dollars a year. However, you might want to know just what you’re getting into before you have the device installed in your car.

The safe driver device literally operates like big brother and monitors your every driving habit, including how many miles you drive, how many sudden stops you make, and even what time of day you drive. Progressive then analyzes the data and determines how much of a "safe driver" discount you deserve. This new method of monitoring driving habits has been deemed the "pay-as-you-go" system and Progressive is the first insurance company to introduce it. Proponents of the system say that it is fairer than the old flat rate system because it rewards generally safer drivers.

Despite the benefits of the system, critics argue that there are privacy concerns. For example, State Farm is stretching the system even further by installing a GPS that will track the location of vehicles. State Farm maintains that it simply is trying to better locate vehicles to provide roadside assistance. Others aren’t so convinced that insurance companies won’t use the personal information for more nefarious purposes in the long run. The uncertainty and the privacy concerns call into question whether a pay-as-you-go insurance plan will gain widespread success.

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