Car insurance companies use all sorts of programs to offer discounts to customers, and State Farm is no exception. But its new program, collaborating with Ford, might be one of the least traditional routes to reward drivers, mostly because it would force drivers to give up their privacy to cut their insurance rates.
Using Ford’s Sync Vehicle Health Report software in 2009 and newer vehicles, State Farm will be able to offer greater discounts in its Drive Safe & Save program, an expansion of its In-Drive pay-as-you-go insurance policy. According to State Farm, drivers who average 1,000 miles per month will be able to save 10 percent in the program; lower-mileage drivers may be able to save as much as 40 percent. Just by enrolling in Drive Safe & Save, drivers will get a five-percent discount on their insurance rates, which can be adjusted biannually. But instead of putting sensors in your car provided by the insurance company, it will use Ford’s Sync telematics software.
Opting into the Drive Safe & Save program won’t come without its drawbacks, though, as it’ll involve the insurance company being able to track your driving patterns and mileage. Insurance companies have been digging for years to find more psychographic information to adjust insurance rates, and Ford’s giving State Farm the software with which to do it. Progressive Insurance uses a similar approach with its Snapshot program, plugging a monitor into a car’s onboard diagnostics computer port.
“We’re excited to have Ford as a partner in this effort,” said State Farm Senior Vice President Mike Wey in a statement. “State Farm is always looking for better ways to serve our customers.”
By using the Vehicle Health Report, a program that allows owners to request diagnostic information about their cars without having to carry a subscription, Ford gives access to any information available from the engine’s computer. That could include anything from maintenance records to average speed or even locations traveled, if equipped with a GPS. State laws only allow insurance companies to use certain information when pricing telematics-based pay-as-you-go programs, but that doesn’t stop insurance companies from studying every aspect of a driver’s behavior behind the wheel to track patterns and adjust general rates over the long run.
But, as always, drivers are not forced to opt into such programs. It seems to be like a shopping club card that incentivizes using it, except it can potentially track your every move. Do you think it’s worth the discount, having nothing to fear if you’re a responsible driver? Or does it give too much leeway to Big Brother?