ROSEVILLE, Minn. — The Progressive group of insurance companies will begin offering usage-based auto insurance to 5,000 drivers in Minnesota beginning August 16. TripSense provides participants discounted rates depending on how much, how fast and when they drive.

Customers who register a vehicle in the TripSense pilot program plug a data-logging device, called TripSensor, into a port in their car. Participants receive a five percent discount on the six-month premium for each registered vehicle. In subsequent policy periods, TripSense customers earn a five percent discount if they upload their driving data to Progressive.

Sharing driving data with Progressive is optional, but makes customers eligible to earn discounts of up to 20 percent. "Progressive is committed to finding innovative ways to lower car insurance rates," said Jim Haas, the company’s Minnesota auto insurance product manager.

Drivers who choose to join the program receive a TripSensor, a free, matchbox-sized device that plugs into a vehicle’s On-Board Diagnostic port. TripSensor records how and when a vehicle is driven and this data is used to calculate the discount customers will receive when renewing their policies.

TripSensor is also able to collect information about rapid acceleration and braking, but these are not factored into customers’ insurance rates right now. Progressive plans to use this data to see if it is predictive of future accidents.

As a policy period ends, customers download their driving data to a personal computer using software provided by Progressive. This information is then uploaded to the company.

"Pricing car insurance accurately depends upon understanding risk," said Haas. "Drivers who reduce their risk of being involved in an accident by driving less, driving during lower risk hours or driving slower will be rewarded in this discount program."

This trial of the usage-based discount program is only available to customers in Minnesota who purchase policies online. Progressive sells auto insurance in the state through nearly 1,000 independent agencies. The success of the pilot program will determine its available to more drivers.