Pay-As-You-Drive Car Insurance

Sipos writes "The BBC has a story about pay-as-you-drive car insurance. There is not that much detail about how it would work but it seems that a black box in your car monitors your position using GPS. This information is then reported to a insurance company computer which then works out which roads you used and then bills you accordingly. The article seems to suggest that this will make insurance cheaper. Surely this will only happen for people who drive on dangerous roads less than average, after all there are no less accidents as a result? It also makes no mention of the potential for abuse of privacy this could involve. Are people really prepared to let insurance companies track their every move to save money on car insurance?"

Re:what i'm willing to do

[Anonymous Coward]

Get a newer car and safer car. My last car was a '95 mazda protege and i was paying $1200/year with liability only. I recently bought an A4 and my insurance rose to $1400/year with collision. Collision on the protege would have raised my insurance to over $1800/year

Re:Big brother-in-law, the insurance salesman

[StarOwl]

Articles on one insurer in the US doing this in the US include:

Insurer Eyes Driving Habits [myrtlebeachonline.com]

Insurers offer discounts to customers who allow their driving to be tracked by electronic monitors [cnn.com]

Progressive to Use Data-Logging Device To Help Drivers Save Money On Auto Insurance [businesswire.com]

In the current US trials, reporting the driving information is voluntary. Of course, if/when more consumers participate, I'd expect base rates to go up as the folks most likely to qualify for discouts increase their participation.

Fortunately (or unfortunately for me, since I develop auto insurance rates at another company) the rating algorithm is patented by one company, so I wouldn't expect to see widespread adoption of this technology in the US anytime soon.

Re:Simple Fix

[mikael]

Why don't they just take down the miles of the odometer

Some people do try that. However, odometers are designed in such a way that it obvious to see when the number has been reversed (the gears have assymmetric shaped teeth that allow the odometer to count upwards). Odometers which have been "clocked back" usually have numbers that are misaligned like certain styles of web page counter.

Re:Big brother-in-law, the insurance salesman

[jeremyp]

The BBC interviewed a spokesperson from the insurance company yesterday and they asked her about speeding. She said they absolutely would not be measuring your speed.

No, really.

Honestly, that's what she said and I believe her. I will not, however, be signing up for this scheme because insurance companies are amongst the scumiest most two faced companies there are and I don't believe her.

Re:Big brother-in-law, the insurance salesman

[dasmegabyte]

I think it's really ridiculous that the first thing people think about whenever anybody proposes a voluntary new monitoring technology is how badly it can be abused.

Yeah -- we all know that people really enjoy paying more for the priviledge of being spied on. And that's why these expensive and complicated technologies will be used to infringe on our privacy?

Bullshit, man. Every one of these things I've seen has had MAJOR privacy provisos, like you can review the data before sending it to your insurance or you can just turn it off whenever you like. They've already THOUGHT about the thing you guys are complaining about! And it's not like they're going to make them mandatory. Airbags aren't mandatory for insurance. Anti-lock brakes aren't mandatory for insurance. Shit, even seat belts aren't mandatory for insurance...I get a good driver rate on my '73 Super Beetle with none of these 3; I pay $30 per month.

I know, we're supposed to have a healthy distrust of anybody who wants to give us a discount. But insurance companies really DO want to give you a discount for being a safe driver. Safe drivers are the most profitable segment of the auto insurance market, because they get to pocket every dollar with little worry that they'll have to pay out massive settlements. Car insurance companies fight for good drivers and fight to keep them...shit, I have such a good record with my current insurer that I could wreck my car tomorrow and my insurance wouldn't go up a dime. They'd assume it was a fluke and pay off without worry. It's in my insurance agreement. It actually happened to my friend (they even bought him nicer rims and gave him a loaner).

These new "big brother" tools are OPTIONAL, they're VOLUNTARY, they're CONTROLLABLE, they can be MONITORED and they are heavily RESTRICTED. We have nothing to worry about -- unless "privacy concerns" cause these great money savers for good drivers to be argued out of existance.

Privacy concerns. Meh. I'd rather have the 100 quid.

Re:Big brother-in-law, the insurance salesman

[bob_calder]

Progressive's history of intrusive and pseudo-scientific behavior began when Jack Green retired. They would definitely try to deny a claim if they felt like it. The fact is that the insurance industry is built on well documented statistics, but they have very real limits. Unfortunately, when marketing became more powerful than underwriting at the board table, the marketing guys imposed their own warped view of reality. (Think spammers in charge of network) All kinds of pricing alterations became common that were not adequately - or independently - justified by actuaries. The person who spearheaded it at Progressive was a real paranoid who took the rating structure to the next company she went to work for. Unfortunately, Progressive decided to keep the structure thinking that it had something to do with their marketing success. Maybe and maybe not.

My point is that stuff like this can get away from insurers easily and ends up badly when it is not supervised by adults.

Re:Big brother-in-law, the insurance salesman

[JonnyCalcutta]

Calm down dear, its only a commercial!