America’s auto insurers will push for new driver monitoring systems, such as in-car video cameras, as a way to cut costs and crashes. Who needs driverless cars when all drivers could soon get an electronic nanny?
In recent years insurers have started using various systems, including GM’s OnStar, to check the miles driven claimed by their customers. But upcoming new technologies go much further; gathering and reporting data about exactly how people drive.
Progressive Insurance already has about 100,000 customers signed up for its Snapshot (formerly known as MyDrive) device. It’s a dongle that plugs into a vehicle’s diagnostic port, collecting data about stops, speed and driving time for at least 30 days while wirelessly reporting that data back to Progressive. Drivers who meet Progressive’s standards can qualify for a 25%t to 30% discount.
Progressive’s program is voluntary; hoon-prone drivers can check their results online, and if they’re not getting a discount, they can opt out. (In some states, Progressive can use the data to raise rates, but says opting out drops the increase.) After six months of monitoring, Progressive says the discount becomes permanent — at least until they decide that they want the policy to change, at which point Progressive may want another Snapshot.
Today, Progressive offers the program in 24 states, but will add another 15 states in the next several months, and it plans a nationwide ad campaign for the service early next year.
There’s more than one way to play virtual back-seat driver. Starting Jan. 1, , a boon to California-based DriveCam, which has 150,000 users among commercial truck drivers and parents of teen-age drivers so far. It’s system records video clips of the driver and front of the vehicle just before and after a crash along with data about the car’s movement, and is already frequently used to determine in a crash. In 17 states parents can get the $900 system for free through an And unlike Snapshot, which requires a data port that’s not found in older models, DriveCam can be installed in any kind of vehicle.
Such systems have caught on faster in Europe, but experts inside and outside the insurance industry expect so-called behavior-based policies to become standard within a decade. If monitors reduce crashes among business fleets, it’s easy to imagine how attractive they would be to banks and finance companies when writing car loans or leases. As one Allstate exec said at a “This innovation seems cutting-edge today, but in the future it will be a given, just like air bags and seatbelts.”
The difference? The cost and benefits of air bags and seat belts belonged with the car’s owner, who didn’t have to surrender any privacy for them. The typical American driver pays roughy $1,000 a year for car insurance, and rates have been rising faster than inflation in the past year. Discounts are nice, but insurers should clearly show just how much these nannies will save them and how much of those savings go back to customers. They also should show the customers exactly what data they’re taking, when they’re taking it and what precisely they’ll be doing with it. If they want to peer over our shoulders, we should be able to do the same. (H/T to Joe!)
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