1Pay-as-you-drive policies of several types are likely to become widely available quite soon, for three reasons:

1) Progressive is aggressively rolling out their “behavior-based” product named Snapshot(TM), already in 24 states and planning a near-nationwide ad campaign early next year after reaching 75% of the country;

2) Competitors are scrambling to respond, because they recognize this is a replay of the competitive scenario when consumer credit was introduced in the mid-1990s to improve accident risk analysis — early adopters benefited and late adopters were hurt; and

3) With California’s restrictive regulations and Progressive’s patents covering “behavior-based” approaches, many competitors will start with “verified mileage” policies, which only capture vehicle data to prove actual miles driven, not to monitor driving.

The trick will be for consumers to sort out which type of pay-as-you-drive policy is best matched for each of their vehicles. A “behavior-based” policy might be ideal for the carefully-driven family minivan, while a “verified-mileage” policy would be better for the rarely- but aggressively-driven sports car. Our company and others are preparing to help consumers make worry-free, informed decisions to save as much on auto insurance as possible with these new policies