TomTom Satnavs To Set Insurance Prices 605
nk497 writes "TomTom has signed a deal with an insurance firm that will see its satnavs used to monitor drivers. Fair Pay Insurance, part of Motaquote, will use monitoring systems built into the TomTom PRO 3100 to watch for sharp braking and badly managed turns, rewarding 'good' drivers with lower premiums and warning less skilled motorists when they aren't driving as they should. 'We've dispensed with generalization's and said to our customers, if you believe you're a good driver, we'll believe you and we'll even give you the benefit up front,' said Nigel Lombard of Fair Pay Insurance."
I guess it's time to say "I told you so"? (Score:5, Interesting)
For all those of us who keep saying that this sort of technology will be abused, and all the folks that keep saying it won't - I guess it is our turn to say "I told you so."
My prediction, sales of this SatNav will plummet if people know that they will be monitored constantly.
Re:I guess it's time to say "I told you so"? (Score:4, Informative)
It appears to be opt-in for an added discount.
This is really no different than using iGoogle. You get free extra features on a landing page, they get more data.
If you don't like it, then keep on your existing carrier. I will be staying with mine (AAA FWIW).
-nB
Re:I guess it's time to say "I told you so"? (Score:4, Informative)
It appears to be opt-in for an added discount.
I assumed as much. I just saw a tv commercial for Progressive pimping their new opt-in datalogger. Same deal, the idea is to profile your driving habits to see if you qualify for a discount on your insurance. Theirs goes on the OBD port I guess. Just found this... http://jalopnik.com/138557/more-on-progressives-elective-black-boxes-for-usage+based-insurance [jalopnik.com]
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Re:I guess it's time to say "I told you so"? (Score:4, Insightful)
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Jenny's got you covered (usually -- Rite Aid recently invalidated the number so I now I just go to Walgreens where they don't require cards for sale prices).
Anyway, just tack your area code on to the number 867-5309, and usually about a dozen names will come up. Just pick one.
The hard part is saying it as a natural phone number rather than 8675 - 3 oooh ni-ine.
Loyalty cards are for you not them (Score:3)
What I mean is consumers like them because they feel they are saving. For tracking your purchasing habits they just use your credit cards. Much easier and more reliable. That's why Albertsons didn't need loyalty cards. They finally got them not out of need for tracking, but because people bitched they weren't getting discount prices.
Re:Loyalty cards are for you not them (Score:4, Funny)
For tracking your purchasing habits they just use your credit cards.
I use cash, though I'm not sure they don't track that.
Re:I guess it's time to say "I told you so"? (Score:5, Informative)
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Re:I guess it's time to say "I told you so"? (Score:5, Insightful)
Re:I guess it's time to say "I told you so"? (Score:5, Insightful)
If I'm not into romance novels, but prefer SciFi and they can use that data to advertise SciFi movies to me, isnt it better?
Re:I guess it's time to say "I told you so"? (Score:4, Informative)
Re:I guess it's time to say "I told you so"? (Score:5, Interesting)
Doesn't everyone realize the "tom tom pro 3100" won't be able to communicate without some sort of data plan? TomTom offers plans now that will send you traffic information based upon your location but there is a yearly fee for that information. [tomtom.com] Anyone want to pay to tell the insurance company you were going 10mph over today so your premiums go up? Didn't think so.
Having to pay hundreds for the device and then pay an additional fee for data is killing the stand-alone GPS market. Apps like waze [waze.com] provide GPS routing and real-time traffic information (including location of police speed-traps) for free, all you need is a smartphone. TomTom's grasping at straws with this press release, their market is drying up and they know it. Why pay $300+ and $60+ a year for something that's already free on your phone?
Waze even provides real time road updates by users. For example I can report an accident and the location is marked for other users to see live. TomTom's can't do that.
I have two TomToms. One's an older TomTom ONE and the other is a 5" TomTom XXL. I don't use either one, I use Waze.
Re:I guess it's time to say "I told you so"? (Score:4, Interesting)
If it loses the signal, it's still got ignition and accelerometer to know you are driving. If you do a lot of driving with no GPS data, they're perhaps either going to send an engineer out to fix it, or up your premiums.
Why assume that if you can think of a potential way around it in 3 seconds, then the engineers didn't already think that one through? It's such a dumb assumption.
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Why assume that if you can think of a potential way around it in 3 seconds, then the engineers didn't already think that one through? It's such a dumb assumption.
"You must be new here..."
Slashdot is the 'home away from basement' for every Captain Obvious who erroneously believes they are the next Wernher von Braun.
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Naw. My insurance is tight, dawg....
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'Opt in' assumes you read the condition before you agree to a specific deal. You didn't even bother to RTFA, so it's probably better for you to skip this kind of insurance deal all together. Reading is required.
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..and the only reason it's a trap is because insurance is government mandated. perhaps we should return to the days of optional driver insurance. perhaps it'll remind people that insurance policies aren't magic pieces of paper that protect drivers on the road.. they only protect from over litigious society, which is another artificial construct that should be eliminated. it's like original sin only instead of convincing you that you're incomplete without their snake oil, they hold a litigative gun to you
Re:I guess it's time to say "I told you so"? (Score:5, Insightful)
They are there to protect *other* drivers as much as anyone else. Insurance is a legal requirement because it's reckoned to be better that there is some means of providing financial support to those who suffer at the hands of incompetent drivers, rather than to just resort to suing them and getting the run around for 10 years because they are a deadbeat who can''t pay for your medical bills and loss of income. The kind of idiot who drives badly probably also correlates strongly with the kind of idiot who thinks insurance is for idiots, so in that case I'm very glad to have my policy to fall back on. If driving insurance wasn't mandatory, driving insurance would be too expensive for anyone to afford, and the costs would fall back upon society in another form, which I get the sense you wouldn't agree with either.
While I agree that society is overly litigious, I think the chief manifestation of that is unnecessary paperwork like entire manuals devoted to what NOT to do with a product (do not eat your mobile phone...), and excessive medical tests and interventions. I don't like insurance companies either - because as for-profit entities, they offer a service which has value, and then do their level best to weasel out of providing it. But they do provide a valuable service, even if it's grudgingly.
Re:I guess it's time to say "I told you so"? (Score:5, Informative)
Re:I guess it's time to say "I told you so"? (Score:5, Interesting)
no I wouldn't, and I shouldn't be liable for that either. see there's this thing called 'shit happens' in life and society needs to accept this instead of demanding a way to point blame every time something bad happens. that parent took a risk with his kid's life (and his own) just like I did when we all decided to drive somewhere. this risk is NOT mitigated by lawyers and business owners selling snake oil protection, then building 'optional' surveillance societies around their policy holders to insure max profits. it's dictated by physics, skillset, and awareness. the only risk that it does mitigate is the artificial/legal one threatened by the over litigious society which created it all in the first place because it has increasing trouble dealing mentally with risk.
if you want to mitigate your risk, learn how to drive properly and stay alert while doing so.. if you can't, get off the road until you can! if anything, insurance has a negative impact on this by creating a false sense of security because of how its marketed. you'd think people would be smarter than that, but these days I have my doubts.
Speeding (Score:4, Interesting)
And not to mention _speeding_! The Nav knows what's the speed limit at your location an instead of beeping when you overdo it, it will raise your premium each time, perhaps even rat you out to the cops.
Re:Speeding (Score:5, Informative)
Apart from the fact that very often, it doesn't. (I still have a TomTom 920T, although it seldom gets used these days; it was their top model a few years ago though.) My maps were until recently regularly updated, mapshare updates were applied before every trip, but for a significant proportion of the speed limits around town it was off by a margin of as much as 20 miles per hour, and that's in the few places where it even pretended to know the limits.
My Garmin is surprisingly accurate, both in town and on the highway. Often, the speed limit display changes the instant I pass a new speed limit sign. I haven't noticed any places where it hasn't been accurate, but most of my driving is either within a large urban area or on freeways - I don't do much small town driving. It's been quite handy, especially for freeway driving: "Hey, is this still a 70mph zone or did I miss a 55mph sign when I passed those trucks?"
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Which is pretty sad because I'll bet most accidents occur on the side streets opposed to the highway where you'll be driving at a higher rate of speed. So those of us that routinely spend 95% of our time on a highway will have higher insurance even though we are in a less accident risk activity?
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Insurance companies haves lots of experience figuring out what risky behavior actually looks like and setting their premiums accordingly. Most of us here are speculating about how this will be used using examples of what we think might be risky. Even if you disagree with the example, you could easily get the point by reading GPs post as saying:
If you're driving on a lot of side streets it's probably going to raise your premiums... Just because driving somewhere is legal, doesn't mean the insurance company can't charge you extra for doing it.
Re:Speeding (Score:5, Insightful)
Speeding should be a dangerous risk.
It certainly should be, and it would be if speed limits were remotely sane. Right now speeding is just travelling at the same speed as 90% of the other cars on the road. Speed limits should be set at a speed that most drivers would not be comfortable driving at.
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The last 3 cars I've owned all had a speedometer that was correct to within about 1-2 mph, unless I had my winter tires on, which varied by about 3% (smaller thinner tires with a different diameter)
uh.... (Score:3, Insightful)
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That's just a decision you'll have to make. Do you really want to swerve and slam on the brakes and take the premium hike or will it cost less to just take a scrape and make him pay for it without reporting the incident?
Few people with a relatively modern car are going to accept a scrape or pay for a repair out of pocket.
A proper repair for a scratch and dent can cost thousands since to get a seamless repair they have to repaint the panel that was scratched and blend the new paint in to the adjoining panels. When someone broke into my 7 year old car by tearing off the driver's door handle, it cost $3500 to replace the driver's door panel and blend in the paint with the adjoining panels. If someone pulled out of the a drive
Re:uh.... (Score:5, Insightful)
Unless this thing has a gyroscope or accelerometers, I don't know how useful the braking and turning data is.
GPSR's really aren't THAT precise for those things.
Now I know someone's about to chime in with that "dopler shift" bullshit, but all consumer-grade GPSR's use position change over time for all movement measurements.
The speed data makes sense, not the rest of it. Maybe establishing driving habits, like too many hours on the road. Or when you drive, and where.... geographic and time data could show them who drives in high-accident areas.
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Unless this thing has a gyroscope or accelerometers, I don't know how useful the braking and turning data is.
The fact says it measures "G-force impact" amongst other things. Which implies it does have an accelerometer.
It's not just a consumer grade GPS. They supply a normal looking Tom-Tom sat nav, and there's also a fixed black box. Probably this or something very similar: http://www.youtube.com/watch?v=rJq08UNRbXY [youtube.com]
Yes it has (Score:3)
Re:uh.... (Score:5, Informative)
I work in the business of supporting software for these sorts of devices. Many models do have accelerometers, which isn't too surprising when you realize iPhones and other smartphones have them too. Dedicated plug-in devices (not the Garmins or other Personal Navigation Devices (PNDs)) also have OBD2 data collection which can then be sent back to the data farm of the service for collection and processing. That's all in addition to the usual GPS tracking. Fleets like Verizon and Sears, as well as thousands of Mom and Pop places already use dedicated devices in their vehicles and reports are run against them by their fleet managers and supervisors to derive all sorts of interesting interpretations.
You'd be surprised how much money you can save in gas when you are a big enough fleet and you make sure your drivers simply shut off their vehicles instead of idling them. And certainly, your business can be helped by direct dispatching of vehicles to jobs via two-way communications to these PNDs instead of the old way of assigning trucks to geographic zones. Depending on how you wire things up, you can even tell if your bucket truck is actually using the bucket and when that happened.
And yes, you can determine when drivers do a lot less innocent things like using company vehicles for private jobs, or more directly, actually stealing gas via siphoning by doing mileage comparisons against actual driven mileage.
For individual consumers, insurance companies do things like check how many miles you drive, into what areas that you drive (ie. more or less risky areas), as well as hard breaking if the devices have that ability (and most newer ones do). With OBD2 devices, they might even be able to tell a normal consumer (and their insurance company) more about their car's functioning than they could get short of visiting a mechanic.
Knowing what I know about how these devices can be used, I assure you, whether or not you benefit, the insurance company is always benefiting from this information. It's not always sinister, though. If you really have a low risk commute and you feel that you might be being overcharged, this may well be the way to go, but I wouldn't put this thing in a sports car or any vehicle you like to have a little fun in on a nice empty road.
Re:uh.... (Score:4, Insightful)
Maybe I have a car that is driven by me during the day, and my daughter or wife at other times.
Why would they care? The insurance is on the car. If you have a bad driver driving it some of the time you can reasonably expect your premium to go up.
Should those people that _must_ drive in an accident prone area really be punished by paying higher premiums?
Of course. It means they are a higher risk. And of course if they park in high theft areas, that's another risk they can quantify.
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Do you really think your GPS is accurate enough to detect a swerve? (:
Don't worry, I'm quite sure it isn't and that they won't be judging you by that kind of maneuver.
Perhaps not, but an accelerometer is.
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Yes, but anything can trip a high acceleration value, so even if they have them, how do you propose differentiating the GPS falling to the ground because it wasn't placed correctly or someone hitting it with something by mistake with that swerve you were talking about?
I did some work on detecting road conditions using mobile phones as sensors, and I can assure you that the accelerometer is far from a reliable tool by itself.
My 7 year old Thinkpad can detect when it's in freefall and park the hard drive heads before it hits the ground, so I think a modern accelerometer enhanced GPS can tell the difference between a short, sharp impact from a fall and a longer more gentle G-force from hard braking or swerving. An orientation sensor can also help.
If your kid is pretending it's an airplane and waving it through the air, that might confuse the sensors, but even that should be distinguishable from legitimate hard braking.
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The head unit is connected to the dashboard unit via Bluetooth and is as far as I can tell, just as a display for the behind the dashboard unit.
If you think about it, that is the only way it could be done, otherwise you would plug the satnav in when doing your boring morning commute, then leave it at home when you go for a blast at the weekend.
You c
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It's in a black box bolted somewhere in your car. Communicates with the display unit with bluetooth. It can't fall to the floor.
Looks like it's only in the UK (for now) (Score:5, Informative)
http://www.theregister.co.uk/2012/02/08/tomtom_insurance/ [theregister.co.uk]
From the article intro:
>The idea has been hovering in the ether for some time, but TomTom is the first satnav firm to sign on the dotted line and bring insurance to drivers through their GPS.
>The Dutch company has joined up with Motaquote insurers to offer UK drivers "Fair Pay" insurance, where customers pay lower premiums because their satnav monitors how they're driving.
Re:Looks like it's only in the UK (for now) (Score:4, Funny)
Good. I'd hate to see my premiums jump just for driving on the right hand side of the road.
The silver lining (Score:3, Interesting)
This is actually a really bad step down a steep slope, even odds within five years at least one state requires this to run a motor vehicle (or tries to).
But... I can see one possible silver lining in all this. Recording what the driver is doing, and see what the profile of a driver who actually gets into accident does might dispel some myths. For instance, if you get too many speeding tickets most insurance companies will raise your rates. But I have always been of the mind that people speeding are paying WAY more attention to the road than the average driver, and in the end probably are not as likely to get in an accident. Well, with these devices, now we would know...
Re:The silver lining (Score:4, Interesting)
From police statistics it is proven that people that speed have a higher risk of accidents. It's a simple as that.
Even if you pay better attention to the road, the higher speed means less reaction time, longer braking distance, and generally higher speed the moment you actually hit something making damage worse. Also if you're doing say 100 km/h on a road with an 80 km/h limit, other traffic may easily misjudge your speed, and try to make a turn in front of you when there is actually not enough time to do so. Or they simply see you coming around the corner too late, and with your too high speed you do not have enough time to stop to prevent an accident.
Generalising: lower speed makes roads safer. Taken to the extreme to make the point: at walking speed not much can happen, and if something happens the damage is minimal.
Re:The silver lining (Score:4, Informative)
From police statistics it is proven that people that speed have a higher risk of accidents. It's a simple as that.
Higher than what?
I can't vouch for the rest of the world, but in the UK speeding is only the primary cause of a small percentage of accidents and most of them are extreme speeding (e.g. 60mph in a 30) rather than people doing 10mph above the limit.
And numerous studies have shown that the safest drivers are around the 85th percentile by speed. They're certainly safer than those who mindlessly drive at the speed limit because they're unable to determine the safe speed for the conditions by themselves.
lower speed makes roads safer
Yet out here in the real world, motorways are the safest roads in Britain, and the speed limits are the highest and pretty much everyone routinely breaks them. Many of the accidents seem to be caused by speed-limited truck drivers falling asleep from the boredom of crawling along a road for hours where they could be driving much faster than they are.
Re:The silver lining (Score:5, Interesting)
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No, those people are intentionally trying to push the limits as fast as they can.
Reasonable drivers drive the same (safe) speed on a road regardless of the posted speed limit.
This is why the DMV sets the speed limit on most roads based on the 90th percentile of car speeds, or so.
Except on interstates. Those things are cash hogs for states, based on all the tickets they get to give out for people doing the safe road speed (75MPH) on roads that might be posted as low as 55MPH.
Re:The silver lining (Score:5, Informative)
From police statistics it is proven that people that speed have a higher risk of accidents. It's a simple as that.
Police statistics also show that driving drunk is unsafe. Of course a sober driver driving home a drunk person who is struck while stopped at a light by a sober person who fell asleep is marked as "drinking related" and used to prove drinking kills. "Too slow for conditions" is included in "speed related" so someone driving 10 mph in the fast lane on a highway at night with no lights on is used in the statistics that prove "speed kills."
Generalising: lower speed makes roads safer. Taken to the extreme to make the point: at walking speed not much can happen, and if something happens the damage is minimal.
Drivers driving 15 mph above the limit are safest (proven by those police statistics you like so much). A stopped car can't avoid a moving hazard.
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Oh, yeah, that is frigging insightful. +4 already. 'Cause there is nothing more insightful than calling someone else an idiot.
Still, I am going to resist the temptation to take this route and instead say that I do not have enough data on GP's statement. It is unlikely but conceivable that speeding drivers are reasonably safe on average (or at least a lesser risk than may others, non-speeding, drivers). People who insist on driving at
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I'd put heavy cash down on the outcome being you're a fucking idiot.
Oh, yeah, that is frigging insightful. +4 already. 'Cause there is nothing more insightful than calling someone else an idiot.
Still, I am going to resist the temptation to take this route and instead say that I do not have enough data on GP's statement. It is unlikely but conceivable that speeding drivers are reasonably safe on average (or at least a lesser risk than may others, non-speeding, drivers). People who insist on driving at 60 miles/hour max in the left lane when everyone else goes 75+ are likely causing quite a few accidents.
It is insightful because the original statement was simply stated... idiotic.
The faster you drive, the longest the breaking distance (a function of the square of the velocity), the less time you have to react, the more momentum your car has and the less time other drivers have to react to your attitude. For any given driver, driving faster is more dangerous.
The original message is idiotic in the sense that it completely ignores the fact that you're simply not alone on the road and that generally drivers ove
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Oh, yeah, that is frigging insightful. +4 already. 'Cause there is nothing more insightful than calling someone else an idiot.
Especially when it is that bloody obvious he's an idiot. Doesn't require much insight at all. Oh wait, you didn't mean that did you?
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They could all be right. Those 10%ers could just be so bad that they're dragging the average way down.
I've known people who drive like that....
Awesome (Score:5, Funny)
Re:Awesome (Score:4, Funny)
That was my thought, too - what about the (usually) well-executed powerslides into my company parking lot I do every night?
Company Website. (Score:3)
http://www.fairpayinsurance.co.uk/Frequently-Asked-Questions/ [fairpayinsurance.co.uk]
Oy, pretty low-quality website there, mate.
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Looks like a site Anonymous might be interested. :D
Are GPS devices reliable for this purpose (Score:5, Interesting)
All privacy questions aside, are sat nav devices reliable enough for this purpose?
I purchased a TomTom device new within the last year. On complex intersections - and sometimes just on parallel roads - it can "snap" the car back and forth between pieces of roadway on the display. Sometimes it seems to think you're starting a turn you're not actually making and then eventually snaps the car back onto the correct road later. When exiting a parking lot it sometimes isn't certain about which direction you're really moving in until you've drove a little. It has also tried to direct me down a variety of local roads that don't actually exist. I imagine at least some of these issues are somewhat common among sat navs, and this is only part of my anecdotal experience with one device.
The point is, when these things become a significant input into insurance rates, who can actually inspect them and certify them for such purposes?
Competition ahoy! (Score:5, Insightful)
Observation: Insurance rates are currently set at a level that the market and competitive pressure will bear, without this additional information.
Prediction: Early adopters will see some benefit in lowered insurance costs, but once most people are enrolled, insurance rates will creep back up to previous levels (that being the established level that the market will bear). Insurance companies will create additional rules that will facilitate a greater rate of insurance claim denial based up the new information, and will see greater profits arise due to this. Consumers overall will see no benefit in the long run.
Re:Competition ahoy! (Score:4, Insightful)
On average insurance wont get much cheaper. But it'll get cheaper for safe drivers and more expensive for unsafe drivers. Which is a good thing.
Re:Competition ahoy! (Score:5, Interesting)
Re:Competition ahoy! (Score:5, Interesting)
The big problem motor insurers have always had is properly assigning risk - it's pretty obvious an 18yo male is more dangerous than a middle aged woman, but that's a statistic, not a cause. If you could find out what made the 18yo dangerous, you could charge for that instead and have fairer premiums for the rest of us.
I love how they always sell it... (Score:5, Insightful)
Before someone says "free market!", keep in mind that nearly every insurance company does this to some extent, usually with no proof of their claims, and insurance is legally required to some extent in most of the country. The free market does not exist, never did, and never will.
bad statistics to base premium on (Score:3)
Just because I have had extensive training on how to make a car handle best in several safety trainings, race trainings and alike and actually use that in daily traffic, does not make me a bad driver. Just because I choose to buy a car and tires that can handle larger G-forces does not make me a bad driver. However, if you take statistics of all drivers that have proven to be crash-prone, you will find similar high g-force readings, if you decide to look at only g-forces and not at the full circumstances where those occur. Sure, for generic profitability an insurance company would do fine, but you would also be discriminating against people that have taken extra trainings and are in fact your best customers, since they pay their premiums and never ever claim.
Re:bad statistics to base premium on (Score:4, Insightful)
Maybe you've just been lucky. Accidents don't happen often enough to be a great risk predictor for the future. From the sound of it, maybe when you do have an accident it will be a big one, and you'll total the car. And that'll be more significant than the 2 mild fender benders that the little old lady next door has had in 20 years.
hacking satnavs (Score:4, Interesting)
Screw this. (Score:5, Insightful)
JUST SAY "NO" TO BEING TRACKED EVERYWHERE YOU DRIVE
Are we already monitored enough? (Score:3, Interesting)
Similar insurance scheme was already tested in UK 7 years ago by Aviva. It was called PayAsYouDrive where GPS device would trace your route and your insurance will be paid based on your route and time of the day. This was designed for young drivers which insurance premiums are high. If they would drive during the daytime insurance would be lower compared to night time when most accident happen for young drivers.
There was a talk that government could use the same principle for charging us for using roads. In this case it would be compulsory for every vehicle in UK to have GPS. Different charge would be for different roads and different times. This would be used to stop people using main roads during rush hour and help road overcrowding. Obviously, the charge per mile of road during rush hours would be much more expensive and people would plan their trip after rush hour. Also they could use the same data for issuing speeding tickets too.
Would you like your country to start similar schemes or this is too much control?
"'We've dispensed with generalization's" (Score:4, Funny)
privacy shmivacy (Score:3, Insightful)
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Wonderful, a system that will save the company a metric fuckton of cash and they'll pass on some unspecified fraction to us. How noble. I'm not saying it's a useless or immoral thing (quite the contrary), but it's hardly cause for public celebration when a company does something to increase their profits and it coincidentally helps the rest of us.
Insurance companies have always profiled drivers and charged them as much as they can get away with in a competitive market. The only change here is they'll have better information for profiling the driver. Good news if you're a lower risk driver, and vice versa.
Now how about using that system to charge someone like me, who drives maybe 1,500 miles a year, less than someone who drives at or above the American average of ~12,000 miles a year?
Obviously milage is one of the many risk factors they can and no doubt will take into account wit this system.
Re:What about external hazards? (Score:5, Insightful)
They can ccululate data of everyone they monitor and correlate patterns against claims. They'll soon know what constitutes risky driving far better than anyone's theories.
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Re:What about external hazards? (Score:5, Insightful)
Most of the time sharp braking is for something which shouldn't be in front of the car
No, sharp braking is what happens when you are yacking on your cellphone or reading a newspaper, and glance up to see that you are about to rear end the car in front of you.
My guess is that frequent sharp braking is strongly correlated with bad driving.
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Driving in a busy city with bad traffic all around can cause frequent sharp braking. You can leave space between you and the next guy all you want, until someone suddenly changes lanes without signalling, pulls out from a side street, space, etc without checking, opens their door into traffic, a guy on a bicycle, a pedestrian not paying attention, etc
Far too many outside forces.
Re:What about external hazards? (Score:5, Insightful)
Re:What about external hazards? (Score:5, Interesting)
Whether or not frequent sharp braking correlates to bad driving is irrelevant. All that matters is whether or not it correlates to a higher accident rate.
If the driver is bad, they'll brake sharply often. But even if the driver is good, if they are regularly surrounded by bad drivers, they'll probably brake sharply often. And guess what? In both cases they're more likely to be involved in an accident.
Re:What about external hazards? (Score:5, Insightful)
Driving in a busy city with bad traffic all around can cause frequent sharp braking
And also results in more accidents requiring payout. The "bad driving choice" in this case is where you drive, rather than your actual skill as a driver.
The insurance companies aren't rewarding you for being better than me. They're rewarding you for being less costly too them.
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My guess is that frequent sharp braking is strongly correlated with bad driving.
Perhaps you meant to guess that bad driving is strongly correlated with frequent sharp braking?
If one is true, then both are true. Correl(x,y) = Correl(y,x). Confusing this is a fairly common mistake people make when discussing correlations, and the cause of a lot of misunderstandings about statistics.
Re:I don't see why this is a bad thing. (Score:4, Insightful)
I'll second that. (Score:5, Insightful)
Re:I'll second that. (Score:5, Insightful)
and it's also how insurance dies. Isn't the purpose of insurance to distribute risk?
Re:I'll second that. (Score:5, Insightful)
Insurance is a bet against the house. It's always a losing proposition net, or insurance wouldn't be a business. The house always wins. They engage people called actuaries, who are quite skilled in evaluating risk.
Insurance can still be a great deal. I can't afford to replace my car or house this month, so I pay these people a fraction of these things' worth to insure that if something bad happens I can still do the needful thing. To average my risk across the similarly situated costs money, and it's well earned - and the profit too.
But the more narrowly the insurance company focuses on the exact risk I have, the closer they get to offering no value, because I might as well carry the risk myself.
Re:I'll second that. (Score:5, Insightful)
There's still benefit in insurance even if you think you can self-manage your risk.
1) You cant actually calculate your own risk without a statistically significant number of events, and by then you are probably finished using the item.
2) Insurance is a know, regular cost and you can budget for it.
3) If you self insured and had a major accident a short way in, you may not be prepared for the lump sum costs.
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Your point is wrong though –for some people, they add less value by removing uncertainties. For others, they add more value. For many good drivers, they'll end up with lower premiums, and do the exact same things as they used to do. That's much much better value for them.
Re:I'll second that. (Score:4, Insightful)
The problem is that insurance companies only want to insure drivers that never have accidents, if you are poor risk, because you live in an area where you might get your car stolen, other people drive badly and crash into you, or you have to take avoiding action, you will get harshly penalised even though your only solution is to move to a better (and more expensive) area ...
In the UK you have to by law have insurance, and so the insurance companies are running it like a cartel ...
Re:I'll second that. (Score:5, Insightful)
Ehhhh NO....
What they do is pigeonhole. Statistics works because it works over a crowd. However statistics has a flawed insight in that it is hindsight and self-fulfilling.
Imagine the following. Let's say that walking 1 KM per day reduces your chance to die by 80%. Thus insurance decides to say, oh wait I can offer better rates for life insurance if I look at all those people who walk 1 KM per day. So off the insurance goes and people start walking and we are happy little bunnies. No, we are not because what happens if everybody starts walking 1 KM per day? Answer probably pedestrian accidents go up, and thus the rate of death that the actuaries came up with is wrong, and they end up paying higher than they calculated. Thus the insurance runs out of money.
This is the problem, and this is why insurances in their quest to nail down their clientel is actually doing a disservice to themselves.
So now comes the golden question, "ok if you are so smart point out where this has happened?"
Answer; real estate. Remember those loans with no questions? Well it was the result of some actuarials thinking this through and saying, "in the past only X have defaulted thus these loans are a gold mine." So off the investment banks go and write oodles and oodles of these loans. What they forget is that if you write too many of these loans the probability of default actually goes way up since the conditions are not the same. And what ends up happening? Oh yeah the US government has to bail out the industry.
So sorry beep wrong answer... There is less value in doing this. The insurance companies would be better off just looking at the overall records and leaving it at that.
Re:I'll second that. (Score:5, Insightful)
Re:I'll second that. (Score:4, Informative)
Also insurance (at least car insurance in the UK) covers other people too - which is a risk you can't calculate.
If I have an accident, which is proven to be my fault, my insurance covers it*. That's why it is illegal to drive in the UK without some kind of insurance (3rd party cover in this case). The cost to me in the long run if I do have an accident which is proven to be my fault, goes up because the insurance company sees me as being a greater risk.
If you're comfortable with idea of you crashing into a Ferrari, go ahead and self insure. I know I couldn't, so I buy insurance.
* In the UK, you usually have to cover the first £100 - £500 depending on your policy, to stop frivolous claims.
Re:I'll second that. (Score:5, Informative)
Adjusting premiums to match individual risk does not eliminate the fundamental insurance benefits of risk and capital pooling -- you still get to free up all the capital you'd need to self-insure by pooling premiums from all policyholders, even if those policies have difference prices. If anything accurate risk assessment and pricing makes insurance more efficient; if risk is inaccurately estimated the insurance company itself takes on more risk and must charge a higher margin to justify the cost of that risk.
That's not to say there aren't privacy implications, but I don't see the financial downside to better risk assessments with respect to insurance.
Wow, /. has an actuarial constituency. (Score:5, Insightful)
Who knew? I think that's amazing.
Insurance is a business and the more they can cut outlays to premiums the more profits they make. I'd rather they more closely aligned risks with claims than they just denied fair claims, which saves mone on the other side. In case I didn't make this clear: I'm OK with insurance companies making money off me, even if they turn a profit because I have low risk. I'm paying over a thousand dollars a month for medical insurance, and using about $500 worth a year for my family - with no pre-existing conditions or reoccurring need for medical care. And to me it's money well spent because in America today you can't get treated if you don't have insurance. Almost everybody gets sick now and then, kids break their arms or legs or whatnot, and to take them to the emergency room without insurance would cost me my house.
Ten of my coworkers and I could pool our contributions together and BUY a doctor and all his gear - and he'd work six days a year, but that's a whole other issue. We're talking about insurance now.
You can't deny that the closer to fact they gauge the risk, the more they diminish the "uncertainty" that motivates the buyer of their product. Defending against the slings and arrows of uncertain fortune is their value-add.
Re:I'll second that. (Score:4, Interesting)
You're forgetting the most important part. Insurance companies don't have to tell you how much of a risk you are calculated to be. So as long as they can convince some customers to pay more, the companies can afford to let some customers pay less.
Insurance isn't about charging people exactly how much they will have to pay out. It's about spreading loss costs over a wide populace. Risk calculation is important to make sure you're collecting enough premiums to cover everyone and to avoid grossly-overcharging low-risk customers (since they would eventually wise up and leave).
Besides, insurance companies don't make money off the premiums they collect. They invest the premiums and turn profits on the returns. It's the actuaries' jobs to ensure insurance companies don't take on so many high-risk customers that they end up paying out more than they are making on their investments.
Re:I'll second that. (Score:5, Insightful)
You're forgetting the most important part. Insurance companies don't have to tell you how much of a risk you are calculated to be. So as long as they can convince some customers to pay more, the companies can afford to let some customers pay less.
They already do that. If you have gone 6 years without any accidents, 6 years without any tickets, and 6 years without any insurance claims, your rate will be significantly lower than if you wrote off a car last year, and had a careless driving charge the year before. They also use statistical analysis for where you live (if you're in a high crime part of the city, your rate will be higher than if you live in the suburbs). They're already using a large number of statistics to determine your rate, but these are statistics that actually have some basis in fact, and a provable meaning based on broader trends.
Using GPS data to determine "how well you make a turn" is BS, and a dangerous route to go. Somebody could be looking 5 feet in front of their car and navigate their turns perfectly, and they're significantly more dangerous than somebody who takes their turns more vigorously, but actually looks to see what everybody else on the road is doing. You simply can't use GPS to determine whether somebody's a good driver, because the GPS doesn't record where their eyes are looking, nor what everybody else is doing. At least going on your accident history, they can have an idea of how often you have gotten in accidents n the past.
Re:I'll second that. (Score:4, Insightful)
Why is it BS? If they've tested this, they would know quite quickly whether there's a statistically significant link to your likelihood of having an accident.
Just because there will be outliers in each group doesn't mean this isn't a sensible way to apportion risk. As a non-smoker I expect my life insurance costs to be lower than those for a smoker. Still I could get hit by a truck tomorrow, while my neighbor who smokes might live until they're 100.
The biggest problem I can see is the risk that insurance for poor drivers could become so expensive more of them opt to drive uninsured.
Re:I'll second that. (Score:4, Interesting)
On many "insurance" items, I would tend to agree, but in the case of medical insurance and auto insurance, often the amount you would have had to pay out is much higher because the insurance company adjudicates it down. In reality, what we should be doing is to tell the insurance company to give us a good rate because we will pay for all the damage and all they have to do is send their lawyers to fight for us.
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Re:I'll second that. (Score:4, Insightful)
It is about reducing risk. If I have car insurance, I know I am going to be down £650 on the year. If I don't have insurance, I might be down £0 on the year, or I might be down £20,000,000 if I crash into a train. That probably won't happen, but if it did, there is no way I could afford it, so I'm giving up some money to avoid that possibility.
Also of course, I am required by law to either have car insurance or deposit something like £5,000,000 with the Attorney General to cover any claims. I don't have £5m sitting around, and if I did, I could make more than £650 per year elsewhere with it.
Re:I'll second that. (Score:5, Interesting)
Jon, I've got a great deal of respect for your /. persona. You seem always reasonable even when I don't agree with you, and you've swayed me often. But here I think you've missed the general thrust. We're on a very subtle topic. The issue isn't "Insurance good/bad" or something that gross. It's about whether the pursuit of use of intelligence to understand the risks of a particular customer of insurance is a good thing, and the limits of that pursuit. That's a cloudy issue you seldom weigh in on, but I'm interested in your input if you will engage the question.