Several years ago Progressive Insurance created a brand new rating mechanism with their Snapshot program. This was the first real use of a device that was installed in a vehicle and used in the determination of an auto insurance rate. For several years, Progressive was the only real game in town for this type of insurance. Over the years though, many other companies have jumped in with both feet.

The whole idea of insurance is to rate a risk for the proper potential of loss and what is more accurate than the actual driving experience of the drivers on the policy? Those drivers who are judged to be safer drivers will pay a lower rate while those whose actions indicate a higher potential for loss will pay more. Makes sense! Unless of course you are the driver given the higher rate.

As with any type of monitoring, a driver is giving up some privacy for the potential of a lower rate. For some this won't matter, for others it will.

In my opinion, as vehicles are built with systems like OnStar, UConnect, etc. already installed, the usage based model will become the standard in auto insurance. Insurance companies will partner with car companies and information that is already being collected will flow easily into an insurance company's rating system.