Insurers launch mileage-based pricing in Washington

After years of development, testing, and getting approval in other states, insurance companies are just getting the green light to use tracking technology to help determine your insurance premiums. The objective is to offer discounts to low-risk drivers.

If you drive infrequently, only drive short distances and don't drive aggressively insurance companies in Washington are driving new bargains to get your business. As of this month, the state Insurance Commission is giving the green light to the use of tracking technology to factor in the amount of driving you when setting your insurance rates.

Progressive, with probably the most ambitious tracking technology- just got state approval to offer it's small device called Snapshot. It attaches to the onboard diagnostic port under your steering wheel and measures the number of miles you drive, the time of day you drive, and whether you do any hard braking. After 6 months of driving, you send the device back to Progressive so they can review the data and set your rate. In launching Snapshot, the company says it's is offering drivers a 30 day try-out regardless of their current insurer.

Other companies will measure your miles through similar devices, or through 3rd party tracking partners such as On-Star to determine how much driving you do. According to the state Insurance Commissioner, 4 insurance companies are geared up to sell you on the concept. So far, mileage-based approval is pending in Olympia for Allstate. The state says Progressive, Safeco and State Farm just got approval this month. Among the four - the companies say qualifying drivers can save as much as 144 percent, depending on driving patterns, by choosing to pay for the way they drive. The companies stress GPS tracking will not be used to determine where you drive. The mileage-based programs are focused on miles, and driving habits.

Washington is one of the last states to approve mileage-based insurance pricing. By law in this state, location tracking cannot be done without full disclosure and without your consent. Washington is among a number of states that restrict the data collected. Mileage-based products are prohibited altogether in California.

According to the Property Casualty Insurers Association of America, many companies are developing mileage-based products and are able to do so within current laws. PCI says consumers seem to be interested in the so-called pay-as-you-drive products.