Progressive Insurance is introducing an optional car insuranceprogram that offers lower rates on vehicles driven in less riskyways. The behavior-based insurance program, called MyRate, givesdrivers a customized rate based on how, how much, and when theircar is driven.

"MyRate is designed primarily for lower-risk drivers who areconsistent and safe," says Richard Hutchinson, Progressive's MyRategeneral manager. "They drive at low-risk times of day, and theykeep alert for others on the road. They don't make fast lanechanges or follow too closely behind other drivers, so they don'thave to overreact or slam on the brakes."

Drivers who choose to sign up for MyRate receive a smallwireless device that plugs into a port in their car. The deviceallows Progressive to see how, how much, and when the car is beingdriven. Cars driven less often, in less risky ways, and at lessrisky times of day can receive a lower premium.

Drivers with more than one car can select which, if any, oftheir vehicles to enroll in MyRate. For example, a person with asecond car that isn't driven very often may enroll that car inMyRate but may decline to enroll the first vehicle if it is drivenmore frequently or during higher-risk times of day.

New customers can earn a first-term discount of up to 10 percentjust for signing up. Then, depending on the program features intheir particular state, their rate may go up or down at renewal,based on their driving habits. The impact on the rate could beanywhere from a 60 percent discount to a nine percent surcharge. Insome states, there also will be a technology expense for the costof the device and data transmission.

"Because MyRate could lead to a higher rate for drivers in somestates, we want people to know the program is not right foreveryone," Hutchinson says. "The good news is customers who havesigned up for MyRate can review their driving data in a secure partof progressive.com, see how their habits are affecting their rate,and if they choose, make behavioral changes that can lead to realsavings."

Progressive began offering MyRate starting with Alabama in lateJune. A national rollout of the program will continue, pendingregulatory approval, throughout 2008 and 2009. It will be availableto customers who buy their policies directly or through independentinsurance agents.

Progressive's initial foray into usage-based insurance startedin 1999 with a program in Texas called Autograph. Its nextgeneration of usage-based insurance, TripSense, became available inMinnesota, Michigan, and Oregon beginning in 2004. The states withTripSense eventually will be converted to the MyRate program.

Progressive has received patents on its methods and systems ofimplementing usage-based insurance and has licensed these methodsand systems to other companies.