If you've ever seen "Flo," the cheerfully offbeat cashier in Progressive Insurance's ad campaign, you probably know her shtick: that when it comes to auto insurance, Progressive strives to be a little bit different, too.
But Progressive's latest attempt to distinguish itself in Pennsylvania - a plan to offer rates based on drivers' habits, determined by connecting wireless monitors to their cars' computers - has run into a roadblock.
The Ohio company says its usage-based "MyRate" plan offers drivers in other states, including New Jersey, discounts of up to 30 percent if they drive fewer miles, stay off the roads during the accident-prone hours after midnight, and avoid hard braking.
But Pennsylvania officials and Philadelphia's consumer advocate raised questions about the plan, which Progressive says it has temporarily withdrawn.
Lance Haver, Philadelphia's director of consumer affairs, said Progressive provided too little information about what data it would collect and how it could be used or shared. He said he was concerned about consumers' privacy and also about their right not to be penalized for, say, working a second-shift job or having to navigate the city's congested and often-antiquated roads.
Pennsylvania Insurance Department officials said that using habit-based factors in setting premiums was not necessarily objectionable. Some practices, such as asking drivers how many miles they drive each day to work, have long been common. But they said Progressive's MyRate filing left many questions unanswered - including how few miles a policyholder would have to drive to qualify for the full discount.
"The filing was completely ambiguous. It didn't have any details whatsoever," said Chuck Romberger, director of the department's Property and Casualty Bureau.
Progressive spokeswoman Susan Rouser said the company was working with the state to determine how it could meet regulators' requirements without disclosing information that "would be of value to other insurers."
Rouser defended the MyRate program, which is offered in various forms in 20 states - including New Jersey since August 2008.
"It gives customers control over their car-insurance rates so that people who drive fewer miles at safer times of the day, and who don't slam on the brakes so much, can benefit," she said in an interview.
Progressive is slowly shifting MyRate's brand name to "Snapshot Discount" and promotes it online with a picture of Flo holding a really big camera, alongside her really big smile, big eyes, and big hair.
But the device at its heart is not a camera. It is a wireless data recorder mailed to a policyholder, who then plugs it into his or her car's onboard diagnostic port - standard equipment in all U.S. vehicles since 1996, the company says.
In its withdrawn filing, Progressive offered only a broad-brush picture of which data the device captured and how it might be used.
The 17-page filing said, "The device records vehicle information including, but not limited to, the date and time of installation and disconnection, and the time of day and speed at which the vehicle is operated."
Nor did it specify how habits would be evaluated, except to say that the program "rewards customers for responsible driving and reduced fossil-fuel utilization."
The company's filing did promise not to surcharge Pennsylvania customers for habits it considers bad, statistically speaking. In New Jersey and some other states, MyRate data can raise rates as much as 9 percent over a customer's base premium, though the company says such surcharges are being phased out.
Even with the surcharge, the New Jersey program has drawn no complaints, said Marshall McKnight, of the state Department of Banking and Insurance. "We think the primary reason for that is that it's voluntary, and the consumer can opt out at anytime," he said. "From our perspective, it appears consumers are happy with the program."
Progressive says that, across the country, more than 100,000 customers, or about 25 percent of those eligible, have signed up for the plan.
Haver's questions elicited a few more details from Progressive's Pennsylvania product manager, Tim Wiebe, who said in a letter that the MyRate device proposed for Pennsylvania "does not include GPS capability," but can measure acceleration forces, and can use speed and time data to derive "rates of acceleration and braking."
However, Rouser said Progressive planned to focus only on the distance and time of day a car is driven, as well as evidence of repeated hard braking, because each has been shown to correlate with loss claims. She said the company considered using acceleration data, but rejected it.
"We've just found, according to our data, that it's not as predictive as hard braking," Rouser said.
Haver said he remained concerned that city residents could suffer from the plan. Some have no choice but to drive during rush hours, which Progressive considers a medium risk, or between midnight and 4 a.m., which it pegs as high risk. And he said swift acceleration and hard braking were sometimes a necessity on the region's congested and antiquated roads.
Haver said his biggest concern was Progressive's lack of transparency about what data would be collected and how it might be used, immediately or later.
"My primary goal is to protect all the information that consumers provide voluntarily - that it remain the property of the consumer and not be sold by the insurer or used against the consumer," he said.
Still, Haver said he was not necessarily advocating that Progressive abandon usage-based discounts.
"If the company would guarantee privacy, let consumers know what information will be collected, how it will be evaluated and used, then this type of insurance holds promise," he said. "Until then, the risk of abuse outweighs any benefits."