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

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

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

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Richard Hutchinson, Progressive's general manager of usage-basedinsurance, said, "MyRate is designed for safe drivers. It's forpeople who drive fewer miles than average, at low-risk times of dayand keep 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."

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At the ACORD-LOMA Insurance Systems Forum in Orlando in May2009, Roger Grobler, chief executive officer of Australia-basedReal Insurance, said Pay As You Drive programs have sparked someprivacy concerns among regulators and legislators, depending on howinformation is collected and what information is used.

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

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As for Progressive, spokesperson Susan Rouser said the companywill continue to seek approval state by state. She said there havenot been many regulatory roadblocks to the program aside fromCalifornia.

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

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