Drive Safely and This App Can Lower Your Insurance Premium

Ginger Purgatorio, senior vice president for product management at Allstate Corp., is demonstrating a new phone-app feature that, depending on your personality, will either stress you out or warm your penny-pinching heart. As she drives her car through snow-covered Northbrook, Ill., the app is busily recording her speed, counting the distance, and registering any time she slams on the brakes. At the end of 18.1 miles, Purgatorio’s app calculated the tally for how much that one trip would cost for insurance: $1.67.

For more than a decade, auto insurers have had ways to watch a driver’s behavior, often using phone apps or so-called telematic devices that connect to a vehicle and send data to the insurers. Now, Allstate, the U.S.’s fourth-largest personal auto insurer, is going a step further by translating the data into an insurance rate that can vary from week to week. If the customer’s driving appears to be safer, rates can fall. Most programs only apply the rates based on telematic data to policies when they’re renewed annually or semiannually. “Insurance pricing has been fairly confusing and opaque to most consumers for a long time,” says Glenn Shapiro, president of personal property-liability insurance at Allstate. “This is less complicated than that.”