Called the "Snapshot" program, this plan is currently available to drivers in 27 states.
It will allow Progressive to collect data on users' driving habits for 30 days. The devices, which are small enough to fit in the palm of your hand, plug into the vehicle's on-board diagnostic port. Each Snapshot device will track when the user is driving, how often she drives, and other behaviors, such as making sudden stops.
Discounts will be applied for drivers who travel during times of the day when accidents are less likely to occur and who drive less overall.
But there's no real need to worry about privacy; the Snapshot devices don't have GPS, so no one will be able to tell where you're going or where your car or home is located.
With the amazing advances in in-car connectivity that we've seen in 2010 alone, we're not surprised to see tech like this being used by an insurance company. In fact, given the fact that Google's got self-driving cars and Ford's got a car that will read your friends' tweets to you, we're a bit surprised it's taken this long to come up with a plan like Snapshot.
What's your opinion: Would you let an insurance company track your driving for a possible discount? Let us know what you think in the comments.