State Farm's New Driver Discount Device
State Farm Insurance has announced the newest addition to its "Drive Safe and Save" program. The Drive Safe and Save program is a customer savings program that rewards safe drivers who abstain from moving violations and accidents with a discount on their insurance premium. State Farm's In-Drive program is the latest development from the insurance company and its partner, Hughes Telematics.
State Farm policyholders living in Ill., the insurance carrier's home state will be the first group to test-drive the new service. In-Drive is essentially a hybrid of OnStar and a spy satellite. It not only provides you with roadside assistance features, it also reports your driving habits directly to State Farm.
The driver has a small black box, roughly the size of a radar detector, which is connected to their vehicle's diagnostic computer. A small transmitter is also attached to the car's visor. The box allows users to access to services similar to GM's OnStar program, including one-touch emergency response, roadside assistance, and the location of a stolen vehicle. Parents can monitor their children's driving habits as well, as the box reports the GPS location and speed of equipped vehicles. The box will also alert drivers when their vehicle trips a diagnostic sensor, or needs regular maintenance.
State Farm claims the box will also help drivers save money on their premiums when they drive safely. The device analyzes and reports a wide variety driving-performance data, including daily miles driven, acceleration and braking habits, cornering, and average speed. State Farm drivers who elect to utilize this system receive an initial discount of 10 percent, with potential savings being 50 percent of the driver's premium costs. Driving habits are analyzed every six-months, when the policy must be renewed.
Some are skeptical as to whether saving drivers money based on their safe driving habits is the only goal of this program. If State Farm offers discounts to drivers when safe driving is reported, will they increase premiums for drivers who accelerate too fast, brake too hard, or corner too sharply? Only time will tell, but State Farm may lose drivers to other insurance carriers if premiums are in fact increased based on what State Farm deems "unsafe driving."
In-Drive is free to drivers for six months after they pay a one-time $10 activation fee. After the first six months, the price increases anywhere from $5 - $15 per month, depending on the level of service that is purchased. Only five states currently offer Drive Safe and Save, Calif., Colo., Ill., Ohio, and Texas. State Farm plans to extend In-Drive and Drive Save and Save to all states in 2012.