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Starting on February 27, Ford and State Farm's insurance plan will be available in Alaska, Montana, Idaho, and Oregon. Although California, Rhode Island, and Massachusetts are on the no-fly list for unspecified reasons, the two companies intend to expand the program to other states.
In addition to being limited to a few states, the two companies' usage-based insurance program has restrictions on the types of vehicles that can be used. Drivers must own an eligible Ford or Lincoln model year 2020 or newer. Ford refers to these vehicles as "connected vehicles," but doesn't elaborate.
The connected vehicles will be able to exchange data with State Farm directly. Ford did not specify what information the vehicles will share with the insurance company, but it is possible that information such as speeding habits, aggressive braking, and how quickly a driver takes turns will be shared.
Good drivers may be able to save money.
The exchange of information is bidirectional. While the vehicles collect data for State Farm, drivers will receive advice on how to improve their driving habits. Drivers can lower their insurance premiums if they follow these tips. Drivers who improve their driving habits will also receive larger discounts.
"Customers will be able to better manage their car insurance premiums because their rates will be more closely associated with their personal driving characteristics," says Chris Schell, State Farm SVP Property and Casualty. "Drive Safe & Save is a substantial auto discount opportunity, with an initial 10% participation discount off major coverages. Discounts range between 10% and 15%, with even greater savings possible depending on individual driving habits "aviators"
Ford didn't say anything about what kind of premiums the average driver might face. One of the major drawbacks of usage-based insurance programs is that they are heavily reliant on how a driver, well, drives. People who drive aggressively will want to keep their current insurance, but consumers who believe they can fit within the parameters set by Ford and State Farm, particularly current State Farm policyholders, should look into the Drive Safe & Save program when and if it expands to their region.