Car insurance goes Big Brother -- Is it for you?

[kork13]

I seem to remember a conversation along these lines sometime in the past, but saw this article today so I'll bring it up again.

Auto Insurance Enters the 'Pay-per-View' Era - WSJ.com

Insurers are accelerating efforts to tap into the systems that enable a car to communicate with satellites and mobile data networks, and use information about how you drive to set your rates. The companies say that basing your premiums on how and how much you drive—a concept known as user-based insurance or "pay-as-you-drive" insurance—will allow them to accurately target discounts at careful drivers, and charge more spirited customers an appropriately higher amount.

Most of the user-based insurance programs offered ... woo consumers with promises that they won't pay more if they agree to let the insurance company peek over their shoulders as they drive.

How quickly user-based insurance will jump from niche to mainstream is a subject of debate among insurance-company executives.

So what do you think? Would you be agreeable to having your driving habits tracked in order to more accurately set your insurance rates?

Discuss.

[bjl584]

Progressive has this option available to drivers. A device plugs into the computer port under the dash and monitors your driving habits for some length of time. You then mail the device back to them and they set your rates accordingly.

I question the legitimacy of something like this. For instance, if you swerve to miss an animal in the road, the device will pick that up as aggressive driving. same goes for any attempt to avoid an accident. I just didn't feel confident enough in the technology to let it help determine my insurance rates. That, and Progressive gave me a quote that was about $200 a year higher than what I pay now.

[JoeP]

No thank you!

[kork13]

I question the legitimacy of something like this. For instance, if you swerve to miss an animal in the road, the device will pick that up as aggressive driving. same goes for any attempt to avoid an accident. I just didn't feel confident enough in the technology to let it help determine my insurance rates.

Good point. Personally, I don't think I'd be totally opposed to it, but the potential definitely exists for a single minor, completely reasonable sudden reaction in your car (which could very possibly be the safest option) to skew the data sample taken by the chip.

I do think I would want alot of detail on exactly how they use the data before I considered it though... How much "abrupt" driving triggers concern, do I have access to the data, how long does the data impact my rates, how often is the data updated, and so on. However, something tells me that insurance companies would never release that kind of detail into their underwriting practices.

[feh]

So what do you think? Would you be agreeable to having your driving habits tracked in order to more accurately set your insurance rates?

We've already done it - switched to Progressive and the Snapshot program late last year.

[bjl584]

We've already done it - switched to Progressive and the Snapshot program late last year.

Are you happy with the results of the snapshot device? Did Progressive share any details of your driving habits and how it correlated to your rates?

[feh]

Are you happy with the results of the snapshot device? Did Progressive share any details of your driving habits and how it correlated to your rates?

You can see all the data online. It collects things like number of hard stops, distance traveled, number of trips, speed and time of day. I don't know how they use that data to determine your rate.

It does not capture location data, so they don't know where you travel, or if you're speeding. When the car is traveling 55 miles per hour, they don't know if that's on the interstate or where the speed limit is 30.

I'm happy with the results. We're paying quite a bit less than we used to.

[AccountantSalary]

This would depend a lot on the savings that the program offered. I'm a fairly safe driver anyway -- having documented proof would be welcome to me.

[JoeP]

You can see all the data online. It collects things like number of hard stops, distance traveled, number of trips, speed and time of day. I don't know how they use that data to determine your rate.

You see, I'd want to know how they're using the data. Is there a bump up for traveling over a certain distance in a time period? How about night travel versus day travel? What is the mathematical formula for I can validate they are being honest?

[YLTL_Dan]

I have Progressive, and we used Snapshot on one of our cars. It guaranteed your rates wouldn't go up - only stay the same or go down. But of course, I wouldn't have done it unless I knew I could get the rates to go down.

First, I work from home so I knew I'd have very low mileage on my car. Next, anytime I drove I'd be very careful with my driving (slow acceleration, no hard stops, etc.).

Also, my wife goes to work at 3:30am, so there's no way we'd put the snapshot on her car. I'm sure the device tracks the time of day you're driving to help calculate risks. We also drove her car if we were going to be out late at night...

My rates went down by ~25%.