Just how good a driver are you?

Driver behind the wheel.

Kai Ryssdal: Ever since that now-ubiquitous gecko showed up on television, insurance companies have been going all-out to one-up each other. They've poured something like $4 billion into the advertising battle for your business.

Montage of insurance ads: "Get Allstate. You could save money and be better protected from mayhem like me." "Oh! And, rename the company 'Nation-Pam.'" "Wee, wee, wheee! Maxwell! Yeah? You're home. Oh, cool, thanks Mrs. A. Geico. Fifteen minutes could save you 15 percent or more."

Today, Progressive Insurance launched a new nationwide ad campaign hoping its approach will be a game-changer. Our senior business correspondent Bob Moon explains that could depend on how much of your privacy you're willing to give up.


Bob Moon: Up to now, it's been a battle of the various insurance-ad personalities. Now, Progressive is rolling out what it sees as a kind of secret weapon -- one that could give drivers nearly a third off their premiums. Enter the company's perky TV sales clerk, Flo.

Progressive commercial: This little baby keeps track of your great driving habits, so you can save money. Amazing.

She's holding a cell phone-size gizmo that plugs into the car's data port. It calls the company with a regular "snapshot" of driving habits -- from how aggressively the car is driven to whether it's being used during riskier early-morning hours.

Richard Hutchinson helped develop the program.

Richard Hutchinson: It's purely voluntary, you know. So if you think it's something that could help you and something of interest, we offer it. And, you know, our view is if it's not of interest, it's nothing something we're going to require of you.

The new ads paint the "snapshot" device as a way for customers to control insurance costs. But at the Center for Auto Safety, director Clarence Ditlow suggests the companies have a different motivation for attracting better drivers.

Clarence Ditlow: For the insurance companies, it's clear. They pay out less in losses for the premiums that they take in.

Progressive vows it won't use the data to decide accident claims. But privacy advocates worry what the information could be used for.

Paul Stephens: Progressive, obviously, is limited in terms of what they can promise.

Paul Stephens heads the Privacy Rights Clearinghouse.

Stephens: When you give this information up, it can be used in ways that you might not anticipate, which you might not have control over.

Stephens warns it could figure into a case against you made by, say, a private party suing for damages. And Progressive's ads don't mention that.

I'm Bob Moon for Marketplace.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

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