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Parole For Car Insurance Offenders





Anyone who's had an accident or gotten a speeding ticket knows the feeling.

If only you could do things over again, you'd obey the speed limit. Or yield. Or just stay home.

Safeco Insurance is capitalizing on that desire with its new Rewind program, which combines driver monitoring technology with accident forgiveness. Although the program can't turn back time or pay your traffic ticket, it can prevent a mishap from increasing your car insurance premium.

It's a free pass with conditions -- a sort of car insurance parole.

How Rewind works

After a speeding ticket, minor violation or at-fault accident, you enroll in the program and agree to have your driving monitored for a few months. In return, your driving mistake doesn't count against you during the current policy term. (You can get an idea of potential penalties for different infractions with Insurance.com's "Uh-Oh Calculator.")

Safeco sends a telematics device to plug into your car. The equipment tracks when and where you drive, your speed, acceleration and mileage, and it sends the information via a wireless connection to a database. You can check how you're driving by logging onto a secure website.

After the evaluation period, which is typically four months, you're given a "driving safety score," based on the number of unsafe driving moves made per mile. Those include speeding, quick starts, hard stops and driving between midnight and 4 a.m. Safeco then will let you know the results.

If you get a good safety score, you're off the hook for a premium increase tied to the driving mistake. The insurer says it uses the data only to determine whether you qualify for "incident forgiveness" -- not for general rate-setting purposes. (See "Plug in, drive less, save more.")

A new twist for accident forgiveness

Accident forgiveness is nothing new. Many insurance companies offer the benefit to customers with good driving records. (See our guide to good driver discounts.)

Allstate's accident forgiveness program may be the best known, but Geico customers who haven't had an accident in at least five years qualify on some policies to get a free pass on their first at-fault accidents. They escape a premium surcharge and get to keep their five-year good driver discounts. Progressive customers who have been with the company for at least four years and stayed accident-free for at least three consecutive years qualify for its accident forgiveness program.

With the addition of telematics technology, Safeco's program gives accident forgiveness a new twist.

Initially insurers rolled out usage-based programs based strictly on mileage, providing discounts to drivers who put relatively few miles on their cars. Then the programs expanded to monitoring driving behavior and rewarded drivers who avoided risky maneuvers, such as swerving and sudden starts and stops.

Praveen Chandrasekar, automotive and transportation program manager at Frost & Sullivan, a global research and consulting firm, sees Safeco's Rewind as part of the evolving usage-based insurance market, another way to use the data to reach customers.

"One size fits all will never work," he says. "That's why insurance companies are coming out with different programs."

Still in the pilot phase

While numerous insurers -- especially Progressive -- have jumped on the usage-based insurance bandwagon in the last couple of years, Chandrasekar says the U.S. market is well behind Europe in development of programs. It takes years of collecting and making sense of data and pilot testing programs before they can be commercialized.

Safeco, which launched the initial phase of Rewind in 2010, is now piloting the program on a limited basis in about 20 states. The company would not disclose results or whether it plans to expand the offering, citing competitive sensitivity. A spokesperson directed customers to speak to Safeco agents to determine whether the program is available in their areas.

If the program is offered in your area, you can participate if you've had no more than two eligible driving "setbacks." More than one driver insured on a policy can participate, but only one driver can enroll per term, and each driver gets only one shot at the program. Once you've tried to earn one free pass, you can't attempt to "rewind" another accident or speeding ticket down the road.

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