[DRIVE] Trading Privacy for a Discount?
Old-school car insurers are using new-fangled “connected car” technology to save drivers up to 30% on their auto insurance premiums, while making driving safer and more fun. Sounds good, right? But the devil is in the details...
Gadgets That Monitor Your Driving
I recently switched auto insurance companies, and the agent told me that I could get a discount on my new policy if I plugged in a little gadget under the dsahboard. Major auto insurers, including Progressive and Allstate, are asking drivers to allow sensors to be installed in their cars that track drivers’ activities. The sensors track when and how far people drive, how often they slam on the brakes, if they speed excessively, and other driving data points.
This data lets insurers discover exactly who the safer drivers are, the ones less likely to file claims. In the long term, insurers hope to use such data to tailor premiums more precisely to individual drivers. But to get the data, insurers need drivers’ consent to install the sensors. Given what I know about digital privacy, and how large corporations store, share, and secure data, I politely declined.
Here's some information to help you figure out if using one of these devices will result in lower (or possibly higher) auto insurance rates, and other things you should know before you make a decision about using one.
Progressive’s Snapshot program provides an average discount of $20-$25 a month to drivers who install a small device that plugs into the On-Board Diagnostics (OBD) port, which is typically located beneath the dashboard on the driver’s side of cars made in 1996 or later. The device measures a variety of factors related to your driving, including the times of day you drive, sudden changes in speed (hard brakes and rapid accelerations) and the amount you drive. Progressive says most customers will earn a discount, but if the device indicates risky driving that increases the likelihood of being in an accident, you may pay a higher rate at renewal time.
State Farm’s In-Drive system uses OnStar and a Bluetooth beacon that works in conjunction with your smartphone. It offers you an automatic 5% discount with the possibility to save up to 50% on your auto insurance. State Farm says they collect mileage and, in some cases, basic driving characteristics to calculate your discount.
If you use Allstate’s Drivewise gadget, you can save "up to 10%" off your auto policy when you sign up, and "up to 32%" off your policy every six months for your everyday safe driving. (Not sure how they calculate the "up to's" but it's probably based on how well do regarding these criteria: Safe Speeds (below 80 mph), Safe Hours (limit late-night trips), Safe Stops (limit hard braking), and Low Mileage (skip those long trips). Sounds to me that if you work nights, or enjoy road trips, you'll be penalized, even if you're otherwise an excellent driver.
What Is Tracked and Reported?
All three insurers provide a website and mobile apps through which drivers can get feedback on their driving habits and see where improvements could lead to bigger rewards.
So how many drivers taking the bait? About one-quarter of new Progressive customers and one-third of Allstate customers are consenting to be monitored in exchange for discounts or rewards, reports Fortune magazine. Some of the holdouts may be terrible drivers, but many (myself included) have concerns about privacy.
So far, insurers only track how and how far you drive, not where you go and where you park. But such location data is surely of great interest to an insurer. If you habitually drive in high-accident areas or leave your car parked outdoors in high-crime areas, you probably pose a higher risk of loss to an insurer. Many drivers are concerned that location data might find its way into the wrong hands, legally or illegally.
Insurers track only a narrow subset of the data that is available through your car’s OBD port. A slew http://goo.gl/vC9oEQ of third-party diagnostic and roadside assistance vendors cover much more ground.
Verizon’s Hum system, is aimed at car owners with "dumb cars" -- vehicles that don't have OnStar or in-dash displays. Hum costs $15/month, and compiles data on fuel economy, battery charge level, transmission coolant temperature, and engine error codes. It relays that data to Verizon, and a smartphone app notifies you of any problems that need attention. The app explains what error codes mean, and even provides repair cost estimates. If necessary, Hum will dial an ASE-certified mechanic in a Verizon call center to talk you through complex problems. Hum can also contact emergency services, and track your car via GPS if it’s stolen (or just misplaced in a parking lot). Location data, too, is transmitted to Verizon.
Verizon has said that Hum customers will receive offers that may be of interest to them, i.e., discounted oil changes or tune-ups. But Verizon does not have to share your phone number with Jiffy Lube in order to make such offers.
Other Car Monitoring Gadgets
Beyond Hum’s OnStar-like service are startups with even more fancy features. Zubie provides a WiFi hotspot in your car for up to 10 devices, using Verizon 4G LTE service. However, Zubie must be added to an existing Verizon plan. Mojio is an OBD-compatible device that communicates with apps on a smartphone via 3G/GPS. It also talks to Amazon Echo (a.k.a. “Alexa”). Vinli syncs your car’s computer to all of your devices. Using T-mobile 4G LTE, it can stream any entertainment service to any device while you’re on the go.
So how much privacy do drivers really have? Your mobile phone (even a plain old flip phone) has both a wireless radio and GPS that can be used by your mobile service provider to locate you or track your movements. Smartphones keep tabs on your location, and store that history in your Apple, Google or Microsoft account. If you have an E-Z Pass device, your location and speed can be determined by the state or agency that provides it. Maybe privacy really is history.
Your thoughts on this topic are welcome. Post your comment or question below...
This article was posted by Bob Rankin on 10 Apr 2018
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Article information: AskBobRankin -- [DRIVE] Trading Privacy for a Discount? (Posted: 10 Apr 2018)
Copyright © 2005 - Bob Rankin - All Rights Reserved