A few months ago, Saman Jayasekara was shopping online for cheaper car insurance when he came across a new product from Progressive Corp. that offered him the chance to save as much as 30 percent.
But there was a catch. He would have to install a device in his Hyundai Sonata that would monitor his driving habits, such as when he drove, miles driven and number of sudden stops. Progressive would analyze the data to determine whether he deserved a discount.
Jayasekara, a software programmer in New Jersey, enrolled, and after a month he received a 23 percent discount, which could save him hundreds of dollars a year.
"Everybody is scared of being monitored,"...