Allstate: Usage-Based Insurance Delivering Savings to 7 Out of 10

Allstate reports that drivers that are signed up for its usage-based insurance program, Drivewise, will register more than one billion miles driven this month.

Allstate also said that Drivewise is launching in Kentucky and Montana this month, making the usage-based insurance product available in 22 states including New York and New Jersey.

Allstate’s usage-based auto insurance (UBI) product measures mileage, hard braking, excessive speed, and the time of day when a customer drives. Using that data, Allstate calculates insurance premium savings for each customer using its telematics technology. Customers can receive savings equal to 10 percent of premium. After the first six months of use, savings are based on driving performance calculated from the data collected.

The company said that seven of every 10 Drivewise customers save money through the program and no one receives an increase. Of the drivers earning a discount, the average savings is 14 percent per vehicle.

Allstate reports that roughly, a third of all new customers enroll in the Drivewise program, where it is available.

A recent survey found that, despite some qualms, U.S. drivers are open to buying UBI policies, or “pay as you drive” insurance.

The Towers Watson survey indicated that UBI is gaining momentum in the marketplace, with more consumers willing to let insurers monitor their driving habits with a telematics device in exchange for potential savings on their car insurance.

Most (79 percent) respondents to the UBI Consumer Survey indicated they either would buy a UBI policy or are willing to consider the concept, and if insurers would guarantee drivers’ premiums would not rise, that percentage increased to 89 percent.

Progressive Corp., the fourth-largest U.S. auto insurer that pioneered UBI with its Snapshot product, recently said that getting customers to adopt the monitoring technology is still a challenge.

Surveys of prospective Snapshot users showed that “you get about 30 percent of people saying, ‘Yeah, why not?’; you get another 30 percent of people saying, ‘Maybe, I need to know more’; and you get about 40 percent of people saying, ‘No way in hell,'” Progressive CEO Glenn Renwick said.