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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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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.
THL phish sticks
If it's watching for badly managed turns does that mean I get deductions from my next bill every time I nail the apex?
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.
...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.
Great Intellect...
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.
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.
and it's also how insurance dies. Isn't the purpose of insurance to distribute risk?
I'm calling bullshit on your police stats, if you even care to provide them. The complete removal of speed limits has no effect on accident rates.
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.
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.
Learn to love Alaska
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.
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.
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
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.