Big Brother Riding Along With 'Pay-as-You-Drive'? - monitoring device to predict how likely a driver is to have an accident -
While there is a relatively slim chance that you’ll be sideswiped by a Buick on your way to work in the morning, it happens and can be expensive when it does.
But, as with any investment, you’re playing the odds when you pick an insurance plan and pay your premium. And so are the insurance companies. They spin the dice every time you start your car.
Now, a new survey suggests good drivers might be willing to stack the odds in their favor, even if it means having Big Brother on board every time they go for a spin.
UK-based insurance aggregator GoCompare.com found that 92 percent of drivers surveyed said insurance premiums should be based on how they drive; and 97 percent said good drivers should get better insurance.
This “pay-as-you-drive” model is already available in the United States through the Progressive Insurance SnapShot device and helps the insurance company hedge its bets, while rewarding good drivers for actually being good drivers, not just lucky ones.
The question is whether insurance companies will eventually require the devices for all policyholders, and if drivers will be ready to give up their privacy for a break on insurance. Several auto experts weighed in on the issue, and all agreed on one thing: vehicle tracking is here to stay.
Formally known as telematics-based insurance, the plans use a vehicle monitoring device that snaps into the OBD-II diagnostic port on your vehicle. Richard Hutchinson, the usage-based insurance manager at Progressive, says the SnapShot works on algorithms that use your driving style to predict how likely you are to have an accident, and how expensive it will be if it happens. Normal insurance plans use dozens of set variables like age and gender to calculate rates, but the SnapShot taps into literally thousands of dynamic inputs including how fast and what time of day you drive.
The device captures data in one-second intervals. One of the most revealing stats: how much you brake and how often. Over-braking is a key indicator of an accident-prone driver. Hutchinson says SnapShot is a voluntary program, customers can opt-out at any time, and it does not track the car’s location or whether or not you break the prevailing speed limit.
“Drivers who choose to drive less than average may be pre-disposed to a program like this,” says Hutchinson. “This program is still in its infancy, so we’re a long way from this being standard.”
Drivers on the Progressive plan can save up to 30 percent over traditional policies.
Ed Kim, an analyst with research consulting firm AutoPacific, says pay-as-you-drive is part of a growing tech trend, where many online can already track a customer’s habits and tailor their experience accordingly. He says US drivers, too, are becoming more accustomed to giving up their privacy if they can see the benefits.
“American consumers can be antsy about privacy, but in some ways are beginning to slowly accept companies tracking their whereabouts and habits,” says Kim.
While having the government track your driving might be too Orwellian, Kim says we’re more likely to let a private company access our driving data. He says one possible scenario is that the only way to get a much lower insurance rate in the future will be to agree to the tracking.
Read more: http://www.foxnews.com/leisure/2012/04/24/are-drivers-ready-for-big-brother-car-insurance-plans/
While there is a relatively slim chance that you’ll be sideswiped by a Buick on your way to work in the morning, it happens and can be expensive when it does.
But, as with any investment, you’re playing the odds when you pick an insurance plan and pay your premium. And so are the insurance companies. They spin the dice every time you start your car.
Now, a new survey suggests good drivers might be willing to stack the odds in their favor, even if it means having Big Brother on board every time they go for a spin.
UK-based insurance aggregator GoCompare.com found that 92 percent of drivers surveyed said insurance premiums should be based on how they drive; and 97 percent said good drivers should get better insurance.
This “pay-as-you-drive” model is already available in the United States through the Progressive Insurance SnapShot device and helps the insurance company hedge its bets, while rewarding good drivers for actually being good drivers, not just lucky ones.
The question is whether insurance companies will eventually require the devices for all policyholders, and if drivers will be ready to give up their privacy for a break on insurance. Several auto experts weighed in on the issue, and all agreed on one thing: vehicle tracking is here to stay.
Formally known as telematics-based insurance, the plans use a vehicle monitoring device that snaps into the OBD-II diagnostic port on your vehicle. Richard Hutchinson, the usage-based insurance manager at Progressive, says the SnapShot works on algorithms that use your driving style to predict how likely you are to have an accident, and how expensive it will be if it happens. Normal insurance plans use dozens of set variables like age and gender to calculate rates, but the SnapShot taps into literally thousands of dynamic inputs including how fast and what time of day you drive.
The device captures data in one-second intervals. One of the most revealing stats: how much you brake and how often. Over-braking is a key indicator of an accident-prone driver. Hutchinson says SnapShot is a voluntary program, customers can opt-out at any time, and it does not track the car’s location or whether or not you break the prevailing speed limit.
“Drivers who choose to drive less than average may be pre-disposed to a program like this,” says Hutchinson. “This program is still in its infancy, so we’re a long way from this being standard.”
Drivers on the Progressive plan can save up to 30 percent over traditional policies.
Ed Kim, an analyst with research consulting firm AutoPacific, says pay-as-you-drive is part of a growing tech trend, where many online can already track a customer’s habits and tailor their experience accordingly. He says US drivers, too, are becoming more accustomed to giving up their privacy if they can see the benefits.
“American consumers can be antsy about privacy, but in some ways are beginning to slowly accept companies tracking their whereabouts and habits,” says Kim.
While having the government track your driving might be too Orwellian, Kim says we’re more likely to let a private company access our driving data. He says one possible scenario is that the only way to get a much lower insurance rate in the future will be to agree to the tracking.
Read more: http://www.foxnews.com/leisure/2012/04/24/are-drivers-ready-for-big-brother-car-insurance-plans/
