TomTom Satnavs To Set Insurance Prices

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."

Comments

Re:uh....

[gandhi_2]

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.

Competition ahoy!

[RedCard]

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:What about external hazards?

[BasilBrush]

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.

I love how they always sell it...

[bky1701]

...as a "discount" for those exhibiting the behavior they want. In fact, they simply raise prices for everyone at such a rate that the discount is in fact the lack of a penalty. Yet, somehow, dressing it up in this way avoids backlash and consumer protection lawsuits, while convincing people to give up their privacy in ways they would have never considered has it not been for the phantom carrot of a "discount".

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.

Re:What about external hazards?

[ShanghaiBill]

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.

Screw this.

[kheldan]

If the insurance company I use announced they'd start doing this, I'd cancel and switch to someone else immediately, and I'd recommend the same to everyone I know.

JUST SAY "NO" TO BEING TRACKED EVERYWHERE YOU DRIVE

I'll second that.

[symbolset]

This is how privacy dies.

Re:I'll second that.

[Anonymous Coward]

and it's also how insurance dies. Isn't the purpose of insurance to distribute risk?

Re:I'll second that.

[symbolset]

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.

[aXis100]

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.

Re:I'll second that.

[realityimpaired]

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.

[SerpentMage]

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.

[RenderSeven]

The unintended consequence (for drivers in general) is that good drivers will see a modest improvement in rates, and less good drivers will see sharp increases. As a result the latter will be forced to leave for an insurance company that doesnt do monitoring, which changes the odds/profits for their driver pool. By effectively cherry picking their customers, insurance companies that monitor are gaming the system to improve profits at the expense of all the companies that dont. This isnt sustainable and can only result in all insurance companies instituting monitoring to keep the playing field level.

Re:What about external hazards?

[GlassHeart]

It's not that complicated. Your personal sharp brake count can be compared to the average count of all drivers in the area. Random events happen to everybody, but if it somehow happens to you a lot more, then either you are extraordinarily unlucky, or you're a bad driver. Either way the insurance company would want you to pay more, assuming they can correlate this behavior with actual accident rates.

Wow, /. has an actuarial constituency.

[symbolset]

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 guess it's time to say "I told you so"?

[mehrotra.akash]

I would PREFER ads suited to the stuff I buy
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"?

[symbolset]

That's an interesting question. The answer is: It's none of your fracking business. You signed away these rights to get your loyalty card discount and who they sell your data to is their own concern, not yours. At this point it's just a metric boatload of data. Whether or not you religiously buy a half-rack of pounders every Friday night is a bit of a brick with a value sold to the highest bidder. If you cared about what they did with it, you should have halted at "do you want a loyalty card?"

Re:What about external hazards?

[zippthorne]

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.

Re:I guess it's time to say "I told you so"?

[Dr_Barnowl]

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:Speeding

[Rich0]

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.