Progressive Insurance Company has rolled out its version of the "Pay As You Drive" auto insurance program, which the company has named MyRate, in Texas--the 15th state in which the program is available.

The program, which is optional for Progressive insureds, uses a telemetry device to monitor the number of miles driven, the time of day the miles are driven, and how hard a driver accelerates and brakes. These factors are then used to rate a given risk.

Progressive and other proponents of such a rating system say drivers benefit because they are rated on how they drive. If they drive safely, the rates can reflect that more accurately than other traditional rating systems.

Richard Hutchinson, Progressive's general manager of usage-based insurance, said, "MyRate is designed for safe drivers. It's for people who drive fewer miles than average, at low-risk times of day and keep alert for others on the road. They don't make fast lane changes or follow too closely behind other drivers, so they don't have to overreact or slam on the brakes."

At the ACORD-LOMA Insurance Systems Forum in Orlando in May 2009, Roger Grobler, chief executive officer of Australia-based Real Insurance, said Pay As You Drive programs have sparked some privacy concerns among regulators and legislators, depending on how information is collected and what information is used.

Some programs, he said, measure only miles driven through odometer readings, while others--like Progressive's--use telemetry devices. Still others have considered using GPS devices to determine where a car is at any given time, Mr. Grobler said.

As for Progressive, spokesperson Susan Rouser said the company will continue to seek approval state by state. She said there have not been many regulatory roadblocks to the program aside from California.

That state, she said, has said it prefers that Progressive use a more mileage-based system rather than tracking other data, such as the time of day a person is driving.

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Progressive&#039;s &#039;Pay As You Drive&#039; Rolled Out In 15th State

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Progressive's 'Pay As You Drive' Rolled Out In 15th State