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?"

Comments

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

Insurers offer discounts to customers who allow their driving to be tracked by electronic monitors

Progressive to Use Data-Logging Device To Help Drivers Save Money On Auto Insurance

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

[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.