State Farm’s Usage-Based Insurance Program Grows Rapidly
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After extensively expanding Drive Safe & Save (DSS) across states in the U.S. since last month, State Farm says it will continue growing the availability of the usage-based car insurance program’s three platforms until it will be available in nearly all states by the end of April.
The usage-based insurance (UBI) program ties insurance premiums to driving data and can offer enrollees discounts on car insurance coverage for safe driving habits.
DSS is currently available in 44 states and Washington, D.C.
Since early December, when it was available in 27 states, the program has expanded to:
- North Dakota
- South Carolina
- New Hampshire
- New Jersey
- West Virginia
- New York
- Washington D.C.
The only states that still don’t have any format of DSS are Alaska, Maryland, Massachusetts, Mississippi, North Carolina and Rhode Island.
DSS is available in three platforms based on various technologies. The platforms using OnStar and SYNC systems measure the number of miles you drive, with fewer miles netting cheaper premiums.
DSS’s In-Drive platform requires an in-car device be installed by the policyholder much like Progressive’s Snapshot device; the In-Drive format bases premium discounts on several factors, including how the driver turns, brakes and accelerates.
State Farm also made increased platform availability in several states since December, including Florida and Texas, which previously offered only DSS’s Onstar format but now offers all three.
Currently, every state where DSS is available offers all three platforms, except for California, Georgia and Washington, which only offer the Onstar format of DSS.
Near-Nationwide Availability Planned by End of April
DSS’s rollout has occurred at “a rapid pace” that will continue through spring, according to Sevag Sarkissian, a State Farm spokesman.
The insurer will make DSS available nearly nationwide in all three platforms by the end of April, with only Alaska and North Carolina offering no DSS platforms by that time, according to Sarkissian.
“State Farm believes the Drive Safe and Save program is beneficial to our customers because it helps us measure risk more accurately, and it gives our customers more control over how much premium they pay for our coverage,” Sarkissian said in an interview with Online Auto Insurance News.
Other Major Insurers Offer UBI Programs
The expansion is a major coup for State Farm and shifts the landscape of UBI offerings where Progressive’s Snapshot has long reigned as the most widely available program of its kind.
Major insurers’ emphasis on offering usage-based options speaks to the strength of UBI’s prospects.
Allstate, Progressive and State Farm, each with their own UBI program, together represent nearly 37 percent of the U.S. auto coverage market, according to the latest data from the National Association of Insurance Commissioners (NAIC).
Currently, Progressive offers Snapshot in 43 states and Washington D.C. and continues its Snapshot Test Drive program, announced this past summer as a competitive bid to siphon customers from other insurers with a free 30-day trial.
The direct-to-consumer car insurer has also had a wide grip on UBI-related patents. Its sixth patent, awarded late last year, included trade protection for an in-car audio alert triggered by bad driving habits like hard turns.
Progressive is currently engaged in a patent protection lawsuit it filed against other major insurers, including State Farm. According to court documents, a teleconference was held on Jan. 14 between litigators in “good faith attempts to reduce or narrow claims in dispute.” Another similar teleconference is scheduled for Feb. 6.
Drive Wise, Allstate’s UBI offering that uses an in-car device similar to Snapshot and DSS’s In-Drive, is available in 10 states: Illinois, Ohio, Arizona, New York, Colorado, Michigan, New Jersey, Florida, Pennsylvania and Oregon.
Travelers, with just over 2 percent of the nation’s auto coverage market, offers IntelliDrive, another device-dependent UBI program that is available in eight states: Alabama, Illinois, Indiana, Maine, Ohio, Oregon, Virginia and Connecticut.
The Hartford, which the NAIC reported wrote the 11th-highest amount of premiums in the auto insurance market, launched its UBI program TrueLane just last year and now offers it in nine states: Arizona, Connecticut, Minnesota, Missouri, Nevada, New Mexico, Oklahoma, Oregon and West Virginia.