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Privacy The Almighty Buck

Pay-As-You-Drive Car Insurance 472

Posted by michael from the cheaper-ha-ha-ha-ha dept.
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?"
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Pay-As-You-Drive Car Insurance

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  • Big brother-in-law, the insurance salesman (Score:5, Insightful)

    by qmchenry ( 266894 ) * on Saturday August 21, 2004 @03:36PM (#10033664)
    I'm already thinking of hacks... I wonder how hard it would be to spoof GPS signals? Of course, 5 cents worth of aluminum foil over the sensor would work, too. Only if they correlate their measure of distance versus the car's odometer would they know if the system had been duped.

    They could also know if you were speeding on a certain stretch of road and up your premium accordingly. "We noticed that you failed to signal your intention to turn 18 times last month. Tsk tsk. Oh, and apparently you've been eating at McDonald's quite frequently, so we've increased your health and life insurance premiums, too."

    • Re:Big brother-in-law, the insurance salesman (Score:5, Insightful)

      by realdpk ( 116490 ) on Saturday August 21, 2004 @03:38PM (#10033683) Homepage Journal
      And when you decide to opt out of it, will they count your "violations" against your score as if they were ticketed? Probably.

    • Re:Big brother-in-law, the insurance salesman (Score:5, Funny)

      by Anonymous Coward on Saturday August 21, 2004 @03:49PM (#10033756)
      "Of course, 5 cents worth of aluminum foil over the sensor would work, too."


      Great, so it's not enough anymore to just make a tinfoil hat for myself. Now I have to make one for my car, too!


    • >They could also know if you were speeding on a certain stretch of road and up your premium accordingly. "We noticed that you failed to signal your intention to turn 18 times last month.

      Umm.. so don't speed and use your turn signal?

      Seems like a fair trade for lower insurance premiums.

      • Re:Big brother-in-law, the insurance salesman (Score:5, Insightful)

        by CristalShandaLear ( 762536 ) on Saturday August 21, 2004 @11:24PM (#10035712) Homepage Journal


        Umm.. so don't speed and use your turn signal?

        Seems like a fair trade for lower insurance premiums.

        How much are you willing to trade for life, liberty and the pursuit of happines? How big of a blue light special discount are you willing to trade for your privacy and personal information?

        What if your life depended it, would you speed? What if every time you turn in the supermarket parking lot you don't use your turning signal, does the discount go away? Have they really thought this through? Have you?

        First it was the little forms on the bottom of coupons. Then it was shopper cards. Then hidden little black boxes in cars. Then exposed little black boxes and let us use the info since we were going to anyway. And unconstitutional searches everywhere you bloody go from the movies to the airport.

        Why don't we just have a sale. All Americans who are willing to give up ALL of their civil liberties in exchange for no taxes and discounts on everything you buy, please raise your hand. The line for your government implant is to the right (where else would it be?). The rest of you on the left are unpatriotic and can check in your citizenship unless you choose to join those on the right.

        Don't you understand that what they are "requesting" today will be "mandatory" tomorrow? All these little chips and digs at our rights are just tests to see how much like sheep they can get us to act like before it's too late.

        Call this flamebait, trolling, tin-foil-hat, wearing, whatever you want.

        But every day we use a piece of our liberty that NOTHING short of complete and entire revolution can give us back.

        So yes. Go ahead. Trade your every movement and purchase on this planet for a discount. And next year when the discount disappears but you still have to report your every move, remember this post and all the others like it that called you a fool.

    • Re:Big brother-in-law, the insurance salesman (Score:4, Insightful)

      by fermion ( 181285 ) on Saturday August 21, 2004 @04:28PM (#10033961) Homepage Journal
      there is really no point. If you have an accident, and they show that you have manipulated the data, they keep your money and do not pay the claim. This would very simple to do if you have an accident in a location other than the one indicated by the GPS.

      The real problem with this plan is that the current mandatory car insurance is there to make sure that if some causes an incident, there is money to pay for damages. Any complicated system that leads itself to abuse will just create more problems.

    • I'm already thinking of hacks...

      The simplest way would be to take routes that go through steel bridges, underground tunnels, and/or travel during electrical storms.

      Then, drivers could learn the cost of each individual section of road and plan their route accordingly. I could imagine drivers would go off the freeway before a complex intersection, take a surface road, then go back onto the freeway.

    • Re:Big brother-in-law, the insurance salesman (Score:5, Informative)

      by jeremyp ( 130771 ) on Saturday August 21, 2004 @05:13PM (#10034190) Homepage Journal
      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.

      • Yep, not only that but as we know (in the UK), the govt are pushing for country-wide road tolls (like we don't already pay fucking ridiculous amounts of tax to drive - tax when you buy the car, tax on petrol, then "value added tax" on the petrol+tax (hey, we now pay over £4.00 a gallon! Whoopee!), then road tax on top of that). So now, there's an incentive for people to black-box themselves, and won't that be convenient for the road toll idea? Oh, and as you mentioned, it'll also help the lazy fucking

    • Re:Big brother-in-law, the insurance salesman (Score:5, Interesting)

      by rattler14 ( 459782 ) on Saturday August 21, 2004 @05:28PM (#10034254)
      whynot.net already came up with a very elegent and clever solution that gets around any sort of GPS, odometer, tracking measures.

      Solution? Put it in the cost of gasoline.

      Think about it. You need gas to drive the damn thing, you can't skirt around that issue. So the more you drive (and thus the more gas you use) the more you are paying for insurance. Now granted, this has a few flaws, namely that it is the lowest common denominator insurance. But perhaps that's a good thing. Additional coverage and plans above the standard could be purchased above and beyond what the baseline covers and would be strictly voluntary.

      You can either read the book (which I found to be very interesting). Or just go to their website, here's the link for this topic

      http://whynot.net/view_idea.php?id=499

      enjoy

  • hmmm, not for me (Score:3, Insightful)

    by Thiago Ize ( 730287 ) on Saturday August 21, 2004 @03:38PM (#10033677)
    Well that sucks for me as I tend to always go above the speed limit. Sometimes a mile above, sometimes 20. I'm pretty sure they would be actively checking the way you drive and if you drive too fast, be prepared for some rate increases.

  • Wrong turns (Score:5, Interesting)

    by Anonymous Coward on Saturday August 21, 2004 @03:38PM (#10033679)
    So what happens when I make a wrong turn in LA and end up in watts or compton, does my insurance skyrocket?

    • Re:Wrong turns (Score:3, Interesting)

      by catbutt ( 469582 )
      If you make a wrong turn into opposing traffic, your insurance will go up as well. And?
    • So what happens when I make a wrong turn in LA and end up in watts or compton, does my insurance skyrocket?

      It's probably part of the concept that people who take wrong turns more often than usual pay above-average fees. 8-)

  • cheaper on average because (Score:5, Insightful)

    by catbutt ( 469582 ) on Saturday August 21, 2004 @03:38PM (#10033680)
    people will alter their behavior if they are being charged this way. Just as you will use less electricity if it is being metered rather than an "all you can eat" plan.
    • cheaper on average because people will alter their behavior

      I disagree. Let's look at one example of prior art...Cell phones. I have a "standard" cell phone plan. It is X dollars a month, with several hundred minutes of free airtime per month. Let's give an arbitrary 400 minutes a month, for argument's sake. The plan is $50 per month.

      My son wanted a particular phone with all the bells and whistles. So he gets one of these pay-as-you-go plans. This plan costs him $0.25 per minute for the first 10 minute

  • Pay As You go eh? (Score:5, Funny)

    by Anonymous Coward on Saturday August 21, 2004 @03:38PM (#10033682)
    Here is my idea. Pay as you go sex. If you last 3 minutes you pay for 3 minutes only.
    • Here is my idea. Pay as you go sex. If you last 3 minutes you pay for 3 minutes only.

      SWAGGER>

      Sorry pal, no way would I EVER do that... With that kind of plan, A single sexual experience would bankrupt most nations! I could never afford it! /SWAGGER>

  • Do We Really Need Mandatory Insurance? (Score:3, Funny)

    by josh3736 ( 745265 ) on Saturday August 21, 2004 @03:39PM (#10033685) Homepage
    I'm not a fan of the government-imposed insurance tax. If someone smashes into you (and is found at fault) who has chosen not to have insurance, you take them to court and force them to pay for your car.

    If you smash into a tree, it's your own damn fault if you don't have insurance.

    Dear government, please stop telling me how to spend my money.

    Thank you.

    • They're forced only to have third-party insurance. This prevents very poor people from injuring people and then being unable to pay for the damage.
    • Yes, but what if you hit me and you don't have the money for my medical bills you've caused? Or the money to pay for my car? What then?

      --RJ
      • We could set up a "payment plan" for the uninsured. The court could mandate that $X or X% of every paycheck goes to paying off the person you hit.

        This way, you can choose to risk it by not buying liablity insurance. But if you do hit someone, then that person would still be compensated for damages.

        I'm just trying to think of new ideas. As long as I can afford liablity, I'll probably but it. What I don't like is laws which force me to buy it even if I don't want it or can't afford it.

        • Yes, but I would need a new car *now* (or my current car fixed) because of someone else's negligence. The payment plan does nothing to address that issue.

          If you can't afford it, don't drive.

          --RJ
        • A payment plan doesn't do me much good if I am out a $30,000 car and have several thousand dollars in medical bills.

        • Re:Do We Really Need Mandatory Insurance? (Score:4, Insightful)

          by stevejsmith ( 614145 ) on Saturday August 21, 2004 @04:23PM (#10033941) Homepage
          So what if I'm a recent [legal] immigrant making $20,000/year and I accidentally hit a $100,000 Mercedes SUV, destroying my $3,000 '88 Ford Focus and inflicting $60,000 worth of damage onto your car? So because I crashed into a car, I am bound for the rest of my life to give up $3,000/year, thereby completely eradicating any sort of chance I had to become a productive member of society and raise children and send them to college who would then go on to be two more members of a productive and non-impoverished society? That's absolutely ridiculous.
          • I went through this scenario years ago. My insurance got canceled (without my knowledge) 10 days before I got into a collision. Although I wasn't the cause of the collision, the court decided I was liable.

            $6,700+ for the other vehicle
            $6,200+ remaining to pay off on my now totaled car

            I moved shortly afterward. The other insurance company sued me, served my previous address and some dimwit signed for it. Insurance company wins a default judgement because I never knew of the suit.

            The state suspends my drive

    • Re:Do We Really Need Mandatory Insurance? (Score:5, Insightful)

      by kavau ( 554682 ) on Saturday August 21, 2004 @03:42PM (#10033704) Homepage
      If someone smashes into you (and is found at fault) who has chosen not to have insurance, you take them to court and force them to pay for your car.

      And what if they hold a minimum-wage job at McDonald's? You'd probably be waiting 500 years to get your money.

      • Around here they also go to jail and loose their license for along time ( perhaps forever, i dont remember at the moment ).
        • First off, it's l-o-s-e, not loose. It makes a huge difference.

          Second, about your sig, which part of "A well regulated Militia, being necessary to the security of a free State,..." do you find difficult to understand? I'm all for allowing people to own guns but I hate it when only half of the second amandment is brought out and waved around. I'm guessing you're not a part of a well regulated militia that is recognized legally.
      • why don't we make it a public utility, like water? Well, we all know the answer to that (insurance companies are grotesquely profitable and corrupt). Still, it's painfully obvious if you live in America (not commenting on the rest of the Earth) that you must have a car. Our entire infrastructure is build around fast, personal transportation. If you must have a car, and you must have insurance, it becomes an essential service akin to electricity, water and the telephone. It becomes equally obvious that the g
      • And what if they hold a minimum-wage job at McDonald's? You'd probably be waiting 500 years to get your money.

        Here's where my beautiful idea comes into play. If they have no money/assets/whatever to pay you off, you get first crack at their organs.

        I'm betting you could get quite a good deal on one of their kidneys. Get said bad driver's kidney, then sell it to some rich couple who's kid needs a transplant. Doesn't matter if they are an organ donor or not.

        Would also be an incentive for bad, noninsured driver no to do it a second time.
    • And what if the amount of damage is in the hundreds of thousands of dollars? How is a court going to force them to pay money they don't have?

      As for smashing into a tree, that is collision insurance, which is optional. Liability is what is required.
    • New Hampshire actually has no mandatory liability insurance law. Virginia has a "bond" option - you could deposit a certain amount of money with the state in lieu of insurance coverage.

      That makes me think. I was in Kentucky last year and got a ticket for driving without proof of insurance (I'm from VA and plan on moving to NH in a few years). Now I have insurance, just didn't have proof on me at the time, so I'm all right, but what if I didn't have it but it was legal in my state for me not to? Would t

  • Why not? (Score:5, Insightful)

    by kavau ( 554682 ) on Saturday August 21, 2004 @03:39PM (#10033689) Homepage
    Are people really prepared to let insurance companies track their every move to save money on car insurance?

    Why not? It makes perfect sense for people who use their car only every once-in-a-while. Why should they pay as much as someone who is commuting from LA to SF twice a week?

    I think many people feel they've nothing to hide and would opt for this payment plan if it can save them significant amounts of money. And as long as it is voluntary (i.e. you can always go with a flat rate), I don't see a problem with it.

    • The number of miles I drive is taken into account on my policy in two ways:

      1. The number of miles I drive each year on each car, and
      2. The number of miles I drive one-way to work each day.

      So, mileage driven is already being taken into account in my premium. This is a more-accurate way to measure it.

      I'll stick with my flat-rate plan, though - I don't want my insurance company penalizing me because I speed on the DC beltway, and I don't want to receive a bill that's huge one month because I took a trip.
    • Well, sign me up anyway. I don't have a car, and one of the reasons I'm avoiding it is the incredible insurance costs for a first time driver, esp. given I'd basically be using it once or twice a month. They can tell I drove from my house, to the next city over? Well, yes, I care, deeply...

    • Re:Why not? (Score:3, Insightful)

      by YouHaveSnail ( 202852 )
      It makes perfect sense for people who use their car only every once-in-a-while. Why should they pay as much as someone who is commuting from LA to SF twice a week?

      For one thing, someone who drives twice a month gets a lot less practice driving than someone who drives every day. It's for this very reason that pilots must fly a certain number of hours each month.

      Another thing: The roads you drive on make a difference. Highway driving, which is what most of us who commute daily do, carries different risks t

      • Re:Why not? (Score:4, Insightful)

        by Planesdragon ( 210349 ) <<su.enotsleetseltsac> <ta> <todhsals>> on Saturday August 21, 2004 @06:33PM (#10034560) Homepage Journal
        For one thing, someone who drives twice a month gets a lot less practice driving than someone who drives every day. It's for this very reason that pilots must fly a certain number of hours each month.

        An automobile is not an airplane.

        When you're in your twice-a-day commute, you eventually get complacant and stop paying attention. Really, once you've achieved proficency, no ammount of time is going to degrade your ability to drive--although you might need to take a few minutes to learn the car, which can actually be done in a parking lot or driveway.
  • The article seems to suggest that this will make insurance cheaper.

    I saw the BBC's news report on TV on this a couple of days ago. They did say that this is how the insurance companies are marketing it, but the reporter came over as being pretty sceptical of it actually doing so.
    • We have a choice here of metered or flat rate water. Metered is cheaper for low users, flat rate for higher. I also saw the article and I'm fairly sure it was leaning towards the same thing.

  • I want my privacy...ooooh! Money! (Score:3, Insightful)

    by Hatechall ( 541378 ) on Saturday August 21, 2004 @03:41PM (#10033696) Homepage
    Are people really prepared to let insurance companies track their every move to save money on car insurance?

    Since when has the general public made it a bpoint to care about their Privacy over Money? You think that the existing lack of privacy occured because the masses didn't have a choice, or were just lazy and took shortcuts allowed by corporations?

  • I don't trust 'em (Score:5, Insightful)

    by ameoba ( 173803 ) on Saturday August 21, 2004 @03:41PM (#10033700)
    Based on my experience with insurance companies, I don't really expect to see them use this to lower premiums, just to raise them and have excuses to terminate policies.

    A great example of the shadiness of insurance companies happened a few years ago in Washington State. The insurance companies lobbied heavily to limit driving privliges for those 16-18 (limited number of minors as passengers, restrictions on driving after dark and whatnot) citing studies saying that it'd reduce the accident rates by a significant margin, which it did. The problem is that they never adjusted the insurance rates downwards to reflect these lowered accident rates, effectively giving their profits a big boost.
    • I'd call that reasonable.

      They do one thing that increases the survivability of minors, decreases the accidents on the road, and made driving safer for everyone, so profit on it.

      If they had invented a device to do so, they'd make money off it too. They just passed laws, however, that improved the quality of life of *everyone* on the road, and their families. Why shouldn't they profit off it?
    • Based on my experience with insurance companies, I don't really expect to see them use this to lower premiums, just to raise them and have excuses to terminate policies.

      No kidding. For *years* I waited, with ridiculous premiums and no claims, with the guarantee that my premiums would drop dramatically when I turned 25, because of statistics and risk groups blah blah.

      Two weeks after I turned 25, my premiums went up $20. I didn't even bother to ask why, I simply switched to another company, who took $100 o
    • The insurance company for my parents did something similar. They were with them for twenty YEARS and only had a couple minor claims. After that, they tried to drop us because of the pool. The problem is the pool is built to every safety standard that applied. We had complained to our state representative.

      Then they dropped us for having a business on our property - in the barn. OK, we split that off. The problem is that because of our business insurance for that address, they KNEW we had a business.

    • Re:I don't trust 'em (Score:5, Interesting)

      by Anne Thwacks ( 531696 ) on Saturday August 21, 2004 @05:48PM (#10034352)
      I live in the UK, and I can tell you there is no way that premiums are based on actuarial risk. Premiums are related to percieved ability to negociate. If you live in a poor area, your premiums go way up. If you drive a 2 litre diesel (75HP), your premiums is the same as for 2 litre petrol (150HP).

      If you buy a second car (so as to have a big one when you need it and a small one when you don't) you cannot use your no claims bonus on both cars, even if you can't drive two cars at once! If you get a minibus, you cant use the no claims bonus from a van on the minibus, or vice versa, even if both are the same Ford Transit body.

      You have to declare the value of the vehicle when you apply for a policy, but if you write off the vehicle, they value it half what you did. I could go on, but no need ... its pretty clear that these people are major league crooks. And they use the fact that insurance is compulsory to demand money with menaces. (Pay insurance or we send the boys in blue round to visit...)

  • I live in Canada, where the costs of car insurance have risen dramatically over the last few years. I drive a 12 year old car, have a perfect driving record and am over 25. I didn't even ensure it for collision (which is the most expensive part of the premium). And still, I pay over $2000/year for insurance.

    Basically i'm willing to sell my soul to the devil for cheaper insurance. If the devil wants me to drive with a black box, then so be it.
  • I'd imagine that much like pay as you go cell phone service, pay as you go car insurance will only be economical to very few individuals...maybe someone in a very large city who only drivers their car a few times a month.
    Can you imagine all the different things they would see you do that could cause them to increase the rates? Driving more than 500 miles a month, driving after 10pm, driving home from a bar, speeding any amount, rolling stop signs, driving in the rain or other poor weather, driving in heav
  • Smoking crack is good kids.

  • This is a near-total dupe of Big Brother in Your Front Seat [slashdot.org], from 10 August.

    I think Michael's RAM chips need a parity check. There's a failed chip in there somewhere...

    p
  • But of course.

    I currently pay $1500 a year, with a PRISTINE driving record, for a 100% paid-off nissan, and a 2002 Jeep wrangler (still making payments).

    I drive ZERO miles to work, and average 10-20 miles per week.

    Why I am paying this much for insurance? Because I'm living in a state with bad statistics. I would GLADLY let my insurance company monitor my driving, or lack thereof, to save money (if the money's right, of course)

  • "I'm sorry sir..." (Score:5, Insightful)

    by nzgeek ( 232346 ) * on Saturday August 21, 2004 @03:44PM (#10033727) Homepage Journal
    "...but our GPS log show that you were travelling at 56 mph moments before the accident. We're going to have to decline your claim..."

    People don't seem to realise that an insurance company's sole purpose in existence is to NOT pay out on claims. Otherwise how do they increase their profits?! Anything that can help them reduce the percentage of claims that are paid out will be snapped up.

    • Re:"I'm sorry sir..." (Score:5, Insightful)

      by Skater ( 41976 ) on Saturday August 21, 2004 @03:51PM (#10033772) Homepage Journal
      They make money not paying claims, but they make more money on investments. That's the real profit - the collecting of premiums and paying claims is just supporting their stock market habit.

      --RJ
      • Blockquoth the poster:

        the collecting of premiums and paying claims is just supporting their stock market habit.

        This is true of all insurance, including malpractice. There's increasing evidence that the "runaway malpractice crisis" in America is actually a simple cyclical effect, as the market fluctuates. But pretty soon we're probably going to institute "tort reform" that will strip patients and consumers of redress in court, while doing nothing to actually rein in costs. But at least we'll stick it

      • Yeah good point actually. Always amazes me when people complain about insurance companies, yet the very same people will happily blow $100 at the local casino.

        Same thing in my book: how the heck to the big insurance companies and casinos exist if they're not totally shafting their clients?

        I think the best type of insurance 'company' I have seen is the old 'mutual society' type, whereby all premiums are invested, and investmen returns over and above a certain safety buffer (after covering costs) are retu
    • If you're like me and hardly ever break the speed limit (I'm in no hurry to get anywhere), this kind of insurance would be great. I'm 29 and have driven about 400,000 miles since I turned 16 and have had one minor accident: my Jeep rolled back into another car at a stoplight. I haven't had a traffic ticket since I was 18. I'm a good driver, live in a safe neighborhood, and I drive 1/2 mile to work. The only time I drive much anymore is on vacation. I'm a safe bet for an insurance company--but why shoul
  • "The article seems to suggest that this will make insurance cheaper."

    When I moved to an area where insurance is cheaper, from the high-traffic centre of town to a community ten minutes outside the city limits but still less than a twenty from work, my insurance went up because I was driving further. When I later moved back into town, it went up again because, although my drive was now five minutes, traffic is higher in town. Is this the kind of "cheaper" they mean? It usually is.

  • Your life is an open book anyways (Score:4, Insightful)

    by kavau ( 554682 ) on Saturday August 21, 2004 @03:48PM (#10033750) Homepage
    Are people really prepared to let insurance companies track their every move to save money on car insurance?

    People don't have a problem with their credit card companies tracking every cent they are spending, so why should they have problems with this?

  • "Are people really prepared to let insurance companies track their every move to save money on car insurance?"

    No.
    Not on your nelly.
    I hope that's clear enough.
  • Question: "Are people really prepared to let insurance companies track their every move to save money on car insurance?"

    Answer: Yes. People are stupid and short-sighted.
    • Short-sighted? Unless you think that most people commit hit-and-runs, I don't see how. If it raises their insurance, they'll stop using it. I drive a sporty car, and my premiums are through the roof, despite my flawless driving record and safe driving habits. This device has the potential to seriously reduce my rates, as my driving patterns clearly wouldn't reflect their stereotype of a 20-something male with a sports car. I don't do illegal things with my car (a few mph over the speed limit notwithstanding
  • Technically, it would be easy for them to download their rate calculation code into the black box as an applet, have it compute the customer's rate for the month, and upload nothing but the final dollar amount.

    However, for some reason it seems highly unlikely that they would ever do it this way.

  • Um... (Score:2)

    by rokzy ( 687636 )
    So, you work out how safe I was after the fact?

    How about if I don't crash, you assume I was completely safe and don't charge me anything?

    No? Oh, I bet you just want to use this to make me pay MORE?

  • Total cost: cheaper? (Score:2, Insightful)

    by Neduz ( 713874 )
    first rule: Companies exist to make profit. Making things cheaper doesn't mean more profit (only in special scenarios). The "cheaper" for some, will most likely result in a lot more expensive for others (and everything added up: a bigger profit for the company).
    Second thought: Installing such things in each cars is going to cost money. How will such expenses make insurances cheaper?
  • ...is that people have to choose between privacy and other rights and saving a few dollars/quid/whatever.

    One or the other. Not both.

  • Bad idea (Score:5, Insightful)

    by bobetov ( 448774 ) on Saturday August 21, 2004 @04:01PM (#10033839) Homepage
    My wife and I were discussing a different take on this concept a couple of days ago, and came to agree that this kind of thing is a *bad idea*.

    Our conversation was about health care premium reductions for opting out of "maternity" services. But I think the same arguments apply here. Basically, this kind of system defeats the core purpose of insurance; namely, to share risk.

    There are times when charging more for a given behavior makes sense (eg quitting smoking) and times when it doesn't (eg driving in safer neighborhoods). Basically, given that people for the most part can't choose where they drive, this amounts to a violation of the risk sharing priciple. It doesn't drive down overall premiums, simply shifts those premiums to an unlucky subset, while getting others a break the didn't earn.

    And of course, the system is designed to encourage safer driving, but we already have that in the form of accident reports and moving violations, which bring up your premium dramatically when you commit them.

    I don't want to see a system where the rich folks get lower premiums due to driving in suburbs, while urban drivers get nailed. It leads to that insurer ending up with safer drivers overall (as the higher premiums for those in Compton drive them out of the insurance pool). In fact, in most cases such preferential insuring is actually illegal.

    You can't accept only low-risk drivers as an insurer, because doing so breaks the risk-sharing concept that underlies the whole system.
  • I know this is heresy for a technology site, but why allow all this privacy-invading electronics in the car if we could do it much more simply with a gas tax [consumerwatchdog.org]? Sure it's not perfect but it doesn't require any extra technology costs and it eliminates a lot of overhead from the current system.
    • A friend of mine turned me on to this idea. Sure, the devil is in the details, but it seems like it'd be one of the most fair ways to handle the problem.

      Keeping inattentive/drunk drivers of the road would help keep the costs down, too. (Perhaps impounding their cars, selling them, etc would do it)
    • Insurance companies are private. Imposing a tax on gasoline would require the government to get involved and fsck everything up. The key to saving money is keep the government out of it completely at all costs.

      I'm against this idea of having a GPS device in the car because it just adds more cost and more overhead. Look at the EZ Pass system on the east coast. It's great for consumers, but the state governments were losing a lot of money on it.

      I'm all for the simplest idea possible. I think this just
  • Are people really prepared to [insert giving up of x privacy or y civil liberties here] to save money [...]?

    Sadly, the answer is yes. I think most people would care much more about their money than their privacy.

  • Less greenhouse gas emission (Score:4, Insightful)

    by presidenteloco ( 659168 ) on Saturday August 21, 2004 @04:04PM (#10033855)
    I'm surprised that in 35 posts no one has mentioned that pay-as-you-drive insurance would tend to decrease driving, and so would help reduce greenhouse gas emissions, global warming, and urban air pollution.

    These would seem to be the major benefits of this
    idea by far, in the grand scheme of things.

    Also. There's no need to track everywhere the car
    goes in Orwellian fashion. All you need is a new
    design of tamper-proof odometer that can be read
    once a year when you renew your insurance.

  • True Pay as you go... (Score:3, Interesting)

    by mrwilson ( 448945 ) on Saturday August 21, 2004 @04:05PM (#10033865)
    A true pay as go or 'those who drive more pay more' concept would be to pay at the pump. The states should add .10 (or whatever) per gallon to go to Liability coverage for all that drive. No more uninsured motorists. No high fees for those that only drive 200 miles per month. It may sound a little socialist but you'd sure see those SUV sales give way to Hybrids.

  • oh, wow! (Score:2, Insightful)

    by tuxette ( 731067 ) *
    It hopes drivers will also be attracted by the added advantage that a car constantly hooked up to GPS is more difficult to steal.

    They're joking, right?

    Picture this:

    You get carjacked. And because the carjacker assumes that you have the GPS setup, he kills you and dumps you in the trunk/boot or something. He then knows he has a certain amount of time before someone or other figures out you're missing, and at least 48 hours after that for the "missing person thing." In that amount of time, the car can ea

  • Great savings for Young & Pensioner Drivers... (Score:3, Insightful)

    by ivi ( 126837 ) on Saturday August 21, 2004 @04:15PM (#10033902)
    Young drivers are usually saddled with -HUGE-
    -annual- premiums, even if they don't drive
    that much (unlikely, but - hey - with Internet
    & other hacking activities eating up our time,
    there's less left over for cruisin'... ;-)

    Excellent idea, who's time has come...
    ie, as soon as it becomes sufficiently
    hack-proof to work... eg, with independent
    checking stations installed, a one-City-only
    policy could work (every time the car passes
    an automatic toll-RFID station, it could
    broadcast its ID & the number of KM's driven,
    up to that point, which could be relayed to
    the insurance company...)

  • Since most of the comments so far seem to be negative, here's a sound economic reason why this could be exactly safe drivers need.

    This new way of insuring aims to tackle a fundamental flaw in insurance -- that there is an Information Asymmetry [wikipedia.org] between the insurer and the insured. People know more about their driving habits than their insurers, so can tell if a policy is good value for them. People who drive on dangerous roads will flock towards high-value policies, knowing that they are likely to benefit

  • Add it to the price of gas. (Score:3, Interesting)

    by Fast Ben ( 241758 ) on Saturday August 21, 2004 @04:39PM (#10034011)
    There was some talk about this in California a few years ago, they wanted to bake the car insurance into the price of gas, so that everyone would automatically be covered. This would have solved the problem with uninsured drivers, as well as promote energy efficient cars - drive a gas guzzler, and you pay more for insurance too. Personally, I thought it was a great idea, but of course the insurance industry lobby shot that idea down real fast.
  • Insurance companies aren't in the business to save you money. They're in the business to make money, as much as they can of it. The end result of this technology isn't going to mean less revenue for the insurance industry no matter what they claim.

    My guess is that they'll use these devices to provide justification for raising rates. You'll notice that insurance companies claimed that seat belt and helmet laws would result in reduced rates as well, but they never did - in ANY state that passed these laws

  • "Free market" does not apply here. (Score:4, Insightful)

    by base3 ( 539820 ) on Saturday August 21, 2004 @05:58PM (#10034395)
    Auto insurance is a mandated purchase by the government, and controlled by a few large companies. Those squealing that the "free market" will prevent abuses either are willfully blind to or for some reason can't see the imbalance of power involved here--in no way could the automobile insurance market be considered a free market in any sense. Because insurance is a government required purchase, and because of the history of the insurance industry robbing the public, the industry is and hopefully will continue to be heavily regulated, which is the only hope of preventing this becoming mandatory except for the very rich who can afford large surcharges.

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