Are you a safe driver? Would you like your insurance premium based on how you drive? If you answer yes, do you speed or drive while using your cell phone, or text or driving drunk? Well I hope not! Are you willing to have an electronic monitor installed in your car? Pay as you drive insurance currently just monitors the number of miles driven. Will it stop there?
I thought about this today as I am barreling down the freeway going home. Normally, I do not even look at my speedometer because I am going the speed of traffic. The irony is people are passing me and I am going 75-80 miles an hour. I realize this when I see a California Highway Patrol car with lights flashing on my left. Suddenly I realize I may be going too fast and let up on the gas.
Thankfully he was not after me! Was he was going to lunch or after someone doing something worse? Do I always speed on the freeway? I normally go the speed of traffic which is much faster than the posted speed. Would I be considered a safe or good driver? I don’t know. Would I want my driving monitored? Would I buy pay as you drive insurance?
I remember reading 1984 by George Orwell when I was in high school. Big Brother is alive and well. There are cameras in cities to monitor crime; employers monitor the Internet at work, and other monitoring of personal behavior. If you think about it, search engines use personal information to help target marketing or advertising to us. Where does it end? Privacy is slipping away, but we are willing participants.
If a company gives you a good reason to reveal something about you, are you willingly to give it up? Think about it, I will give you a discount, if you prove you had good grades in college. Doesn’t it make sense? If they can monitor your driving, you will pay based on the results. Is that a good deal? If you are a good, and careful driver, why not! What if you speed and still don’t get into accidents? Should you get the lowest rates?
What if I drive a Porsche or Ferrari? You know those cars are not meant to drive at 65 miles per hour! That may not be realistic. There are a number of normal stock cars that can be driven very fast. There are parts of this country where the roads are wide open and speed limits are either ignored or not enforced. How would the monitor record this behavior? Should you be concerned?
Okay, you install the monitor thinking you will save money on your automobile insurance. You receive the discount based on the installation! You are a safe, normal driver and your renewal one year later goes up 20%! You call your broker and he/she tells you after monitoring you for a year that you do not qualify for the lowest rate. What do you do? Insurance companies share information. Surprise!
You are stuck! On the surface, pay as you drive insurance sounds wonderful! It is a choice isn’t it? So much of our behavior is monitored for good reasons. Your credit score is monitored so you can get loans to buy a car, get a credit card or buy a home. Life insurance requires a medical exam and a medical history before they will issue a policy. You might say, of course! They are determining risk in insuring you. I am not opposed to monitoring me. I just think it is a double edged sword. It may help you if you have good scores or hurt you if you don’t. What are you doing to make sure you receive the lowest rates when it comes to insurance, credit cards, mortgages or loans? Would you buy pay as you drive insurance?
Photo by: David Hilowitz
I simply drive too much to qualify for a low rate like that. Not to mention, I occasionally can get going a little fast. I suspect my insurance rates could only go up if I were monitored continuously.
Remember the rates would be based on how you drive not how much you drive. I don’t think I would like the constant monitoring anyway.
Is this like that progressive commercial where they take a “snapshot” of your diving (whatever that means). I hate the idea. Let me pay for the consequences for my actions, yes. But if there are no consequences then what am I paying for? It’s “pre-crime”.
I think Progressive has started doing this as well. Right now it is optional, but won’t be surprised if this becomes the norm in the near future.
I think it is a trend particularly for younger and older drivers. Why not go after everyone!
For me, my driving is open to interpretation. I am a safe careful driver, but I will go the speed of traffic.
We just finished the 30 day snapshot discount program with Progressive. It tracked the time we drove, miles driven and number of ‘hard’ breaks. We didn’t get any additional discount on the vehicle we used, so it was just more data for their actuaries to crunch. They say it won’t affect our premium going forward…but it’ll be interesting to see if we have a spike next year.
Technology is providing so much information, I am concerned it can be interpreted incorrectly. I think I will stand on the sidelines and just watch before I step in.
Technology is providing so much information, I am concerned how it will be interpreted. I think I will stay on the sidelines and just watch how it goes for now.
How much of a discount are we talking about compared to traditional auto insurance? I’m a notoriously slow and safe driver so sign me up!
This sounds really cool. There is no such thing where I live in Canada and I wish there was. Since I drive minimally I would be sure to save money with this kind of plan.
You may want to check the market. In the U.S. they always ask how many annual miles you drive, therefore I presume they take that into account. I am insured with Wawanesa which I know is a Canadian firm, you may want to check them out.
I don’t know! Currently, the discount is based on number of miles driven and some (Progressive) actually installs a monitor.
I’ve never actually heard of pay-as-you-drive insurance. I have wondered as well–if you receive a financial benefit but a company gets information about you in return, is it worth it? So far my answer has been yes, but I am beginning to question it now that we are out of debt and not needing financial benefits as much.
In this case, they could use how you drive information against you. The hypothetical insurance company could offer you a discount to monitor your driving. They could use the information to increase your premiums or require you to change your driving habits.
I think it is an interesting concept, I’d have to check it out further. Although our insurance is rock bottom now, as I telecommute and drive and old car. Hubby only drives 10 miles round trip to work and also drives an old car! I’m sure our insurance will rise as hubby ups his commute in his new job.
I will be curious to see how many insurance companies and people change over. If this is a trend, is it a good one? Does it ean lower costs to consumers?
I really like this idea although i haven’t looked into it much yet. I work from home so I figure I could save a bundle….although, my car is clasified as personal use already which gives me a good discount.
You bring up an interesting question! Would paid riders affect your insurance?
I would buy it, but only because I know that I drive significantly better than the average for my age. Being a young male is a really great way to get really high quotes for auto insurance. 99% of the time I drive like a grandpa–3mph over at the most.
Unfortunately, you are grouped with other young inexperienced drivers who pay high premiums until they turn 25 years old. In your case “pay as you drive” may work for you more than other drivers.