Cheaper car insurance rates can now be yours, New Yorkers -- if you drive fewer miles more safely, and agree to attach an electronic monitoring device to your car's dashboard.
It's called usage-based insurance, and it's already in place in dozens of states across the country. It is relatively new to New York, however, and now city officials and the two companies offering it are trumpeting its benefits to boost enrollment.
Under this type of insurance, drivers agree to attach a monitoring device to their car's electrical system. That device relays behavioral information like speed, number of miles driven, time of day the car is used, and how often -- and hard -- the brakes are hit. (The device is not a GPS device, insurers hasten to add.) The data is analyzed and a premium rate computed. Currently, only Progressive and Allstate are offering this type of insurance in New York.
New York City Transportation Commissioner Janette Sadik-Khan said this type of insurance incentivizes good driving. "I think that when people realize they can save real money, and you can save money by driving safely, I think we'll see safer driving and money in the pockets of New Yorkers." She said it makes good financial sense for New Yorkers, who tend to drive less than people in other parts of the country because of the availability of public transit.
Which is a good thing. "There's really a big public policy benefit to a program like this," said Dave Pratt, Progressive’s general manager of usage-based insurance. "If you can save money by driving less, avoiding dangerous times of day and driving more safely, we might actually encourage people not to drive as much, so there wouldn't be quite as much traffic."
Pratt added "we've seen some evidence that being in the program does help people to drive more safely."
The devices also allow users to track their own driving habits via computer.
Allstate and Progress say the program is purely voluntary, and it rewards good behavior without punishing bad. So drivers who routinely speed down the Thruway at 2am won't be slapped with higher premiums. (Or, as Progressive's Flo puts it in a commercial, "before you worry your pretty little heads -- no, your rates can't go up.")
Read more about the usage-based insurance on the NYC DOT's website here.