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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."
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.
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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.
Most of the time sharp braking is for something which shouldn't be in front of the car,
if anything this sounds like it will reward drivers who aren't as focused on the road,
blindly running over pedestrians and driving dangerously slow to avoid "badly managed
turns."
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...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
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?
Is what will happen next, because faking good driver behaveor will give you lower insurance ratings.
I was promised a flying car. Where is my flying car?
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?
Alternatively, it becomes more expensive for bad drivers, and less expensive for good drivers, maintaining a zero sum shift in rates and profits. However, if bad driving behavior is of the type that can be reduced by what is, in essence, a sin tax, then the roads as a whole become safer, driving insurance payouts down. That savings may or may not be passed on to the consumer in some fashion
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.
[FUCK BETA]
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.
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.
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.
If you are not allowed to question your government then the government has answered your question.
Perfectly predictable auto insurance would mean it would cost really bad drivers too much to be able to afford to drive -- and that'd be a good thing, eliminating that risk from the road entirely.
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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.
Help stamp out iliturcy.
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.
So don't live in the United Right-wing Republic of Invisible-penis-of-the-free-market-giving-the-99-percent-the-shaft-istan then.
Know how much it costs me to go to hospital if I get sick or break something? ZERO. FOREVER. Other than what I've already paid in taxes. And my country, and almost all other Western democracies, likes it that way.