Do you ever wonder where insurance companies come up with their premium costs? And how they can evaluate your risk of getting into an accident compared to your neighbor’s? Can they really tell that much about you just by knowing what kind of car your drive, where you live and how old you are?

Progressive’s new Snapshot Discount program offers savings while giving consumers a feeling of greater personalization and perhaps control over their auto insurance premium. This new strategy from Progressive goes beyond simply entering your information into the system and hoping the pre-determined metrics come up with some savings for you. According to Progressive’s website, Snapshot Discount is “a personalized car insurance discount you earn by driving less, in safer ways and during safer times of day. The better you drive, the more you can save.”With promises of up to 30%savings in 30 days, I was more than a little curious to research this innovative tactic.

Snapshot is currently available to Progressive customers in more than 25 states. If you sign up for Snapshot Discount, you will receive a device that plugs into the on-board diagnostic (OBD) port of your car. This little gadget can track how often you drive, when you drive and it can even asses your driving skills. This device will actually tell Progressive if you are an aggressive driver or if you frequently slam on the breaks. Talk about a back seat driver, well front seat, I guess!

For 30 days you drive around with this device plugged in, after which time Progressive will analyze your driving habits in order to determine what discounts, if any, can be applied to your policy. With a promise of up to 30% in savings, driving around with this little device seems totally worthwhile.

If you’re worried about privacy, it might help to know that this Snapshot device does not have a GPS, so while Progressive might be able to track your mileage and habits, they can’t see where you are.

So, are you ready to let your insurance company in the car with you?