Ford & State Farm Partner To Introduce Usage-Based Insurance

Just a couple of days ago, Ford revealed the company’s plans for Drive Safe & Save, a usage-based insurance product developed for Ford and Lincoln vehicle owners with eligible connected vehicles. The insurance will first be introduced in Alaska, Idaho, Montana, and Oregon.

The automaker is collaborating with the insurance company State Farm to activate policies in those states as soon as February 27, 2022, with policies to follow in more states, with the exception of California, Massachusetts, and Rhode Island.

The way the program works is exciting: State Farm customers operating Ford or Lincoln vehicles can improve how they manage their vehicle ownership costs by being rewarded for their good driving behaviors or bolstering their driving habits to take out excess premium costs. Qualifying 2020 Model Year and newer connected Ford vehicles, with permission of the vehicle owner, can share information directly with State Farm to activate Drive Safe & Save. The more customers improve their driving behaviors, the greater the insurance discount they may obtain.

“We’re excited about State Farm’s approach of using Ford’s built-in connectivity,” said Alex Purdy, Ford’s director of business operations, enterprise connectivity. “This agreement further builds on our strong and long-standing relationship with State Farm to continue to deliver value for our mutual customers.”

State Farm’s standard Drive Safe & Save program uses a Bluetooth beacon sent to the policyholder after enrollment in conjunction with a smartphone app. Drivers keep Bluetooth and location services on to record trips automatically.

Drive Safe & Save policies will be available on select model year 2020 and later vehicles. These vehicles will share information directly with State Farm, which calculates the owner’s insurance premium based on vehicle usage and mileage.

“Customers can better manage their car insurance premium because their rate will be more closely associated with their personal driving characteristics,” explained Chris Schell, State Farm SVP of Property and Casualty. “Drive Safe & Save represents a significant auto discount opportunity, including an initial 10 percent participation discount off major coverages.”

State Farm says that customers will get an initial 10 percent participation discount off major coverages and that the best drivers could get discounts of more than 15 percent. Of course, owners’ rates may also rise if their driving isn’t safe enough for the insurer.