For any car owner, auto insurance is a significant but necessary expense. The rates you pay are based on a wide range of factors, including your driving record, your vehicle, where you live and how often you drive (interestingly, in my Newfoundland & Labrador, rates cannot be based on age, sex, or marital status). While these statistics and the actuarial data used by insurers can roughly predict risk, the biggest factoring determining how likely you are to have an accident is your individual driving habits.
Of course, insurance companies have no reliable way of knowing how you actually drive, assuming that you manage to avoid being ticketed for it. You may be the most prudent and careful driver in the country, but if you live in a big city and drive a vehicle with a high collision rate, you’re going to be grouped with all the cellphone-using, makeup-applying, non-signaling, speeding, drunk, high, inattentive drivers when it comes time to determine your rates. But would you be willing to let an insurance company monitor your driving habits in exchange for lower rates?
In the US, Progressive has recently announced MyRate, an opt-in program that uses a device to monitor when and how you drive your vehicle to determine your rates. From Progressive’s web site:
“MyRate is designed primarily for lower-risk drivers who are consistent and safe,” said Richard Hutchinson, Progressive’s MyRate general manager. “They drive at low risk times of day and they keep alert for others on the road. They don’t make fast lane changes or follow too closely behind other drivers so they don’t have to over-react or slam on the brakes.”
Drivers who choose to sign up for MyRate receive a small wireless device that plugs into a port in their car. The MyRate device allows Progressive to see how, how much, and when the car is being driven. Cars driven less often, in less risky ways and at less risky times of day can receive a lower premium.
I am curious as to how the monitoring device will actually work- my understanding is that it plugs in to your vehicle’s OBDII port, which would give it access to information such as vehicle speed, acceleration, deceleration and throttle position, as well as time logs and mileage. There are similar OBDII parental- and fleet-monitoring devices on the market that can measure g-forces and directional changes to detect sudden or aggressive driving and incorporate effective anti-removal/hacking tools, and I would expect that Progressive’s monitor would be similarly equipped. (For fellow tech geeks out there, there are a number of programs available for the iPhone and iPod Touch that can collect similar data using the built-in accelerometer). No word on whether it integrates GPS technology that would allow location tracking but I doubt that it does, meaning that it would be difficult to determine whether, while traveling at 70 km/h, the vehicle is in a school zone (dangerous) or on the highway (equally dangerous).
I am very much of the tinfoil-hat school of thought when it comes to the monitoring of my activities, but I’m warming up to this idea based on the fact that it is an optional program. Better drivers deserve better rates, and the paper statistics often don’t reflect a person’s driving habits particularly well. An opt-in device allowing you to prove your below-average risk makes sense. But would I install one in my car? Absolutely not!
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