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Car Insurance Saving Devices

The Car Insurance industry has tripped across a brilliant piece of marketing that will allow them to track the driving habits of all their customers. I believe these driver-tracking devices hook into your car’s computer system (the diagnostic port). They most likely have GPS capability and a cellular interface to send data back to your insurer. The driver tracking devices track your driving habits, and you can see how well you are doing (online), and you get a discount for installing it on your car, which sounds lovely.

If I put on my aluminum foil hat (i.e. take a paranoid point of view), I find it interesting to hear rights and freedoms lovers (as should we all) complaining about how much information the government collects from them when folks sign up for these kinds of invasive programs without batting an eye.

Allegedly the insurance companies in Canada that have these devices claim that they will not use this data to punish drivers, and that may be the case now, but it won’t remain that way.

Driver Tracking Devices
A version of one of the devices (from the CBC)

If I were collecting specific data about driving habits, I would start doing some analysis on the number of times drivers:

  • Slam on the brakes (yes, that data is there already, your car already tracks pressure on the brake pedal)
  • Breaks speed limits and where (do you do 120 KM/hr on highways or worse 80 km/hr in school zones), if the device has a GPS in it, how hard is it to figure this out?
  • Went to bars and drove afterwards (no, that doesn’t prove guilt, but it doesn’t paint a pretty picture either).
  • How well you maintain your car.

Am I Just Being Paranoid?

Don’t think this can happen? Haven’t you noticed all of this great “directed advertising” Google has been giving you? Data collection about you goes on pretty much all day long, and the folks collecting the data aren’t supposed to use it for nefarious reasons, but what is stopping them? Even sex toys are collecting data on folks.

Yes, I sound like a paranoid privacy nut, but in this situation, I don’t believe that these “money-saving devices” are only for “monitoring purposes”. I will pass on them until I am forced to install one (and yes, I believe that in the future, that might be the case).  However, I think it is a brilliant idea for insurance companies to understand their customers’ driving habits better.

Is this just me being paranoid?

Feel Free to Comment

  1. Recently received a device. The accompanioning conract states “by using this device I agree that the data collected may be sent to USA, ITALY.”
    That was news to me.

  2. I currently use this with my car, and started in August 2014. The Automerit program with Belair Direct. I opted in since I feel I am a good, cautious driver, and the appeal of up to 25% off was, well, appealing. I will try to keep the background info short: It tracks 3 things, everything viewable online: fast acceleration, hard braking, KMs driven at high-risk times 12-4am. It even gives you the exact time these events occurred! Cool and creepy at the same time.
    I average 0-2 total events of fast acceleration/hard braking a week. Either above 12km/h or below 12km/h in one second for accelerating or braking, respectively. Usually I am at 12-14km/h when one of these happen, and they deem those as a low-severity incident. No big deal it seems, but not perfect.
    Overall I am stuck at 10% off my renewal, which should be around $1100 this August. Solid, but I feel deserving of more (but don’t we all?). It has helped me be more conscientious of both accelerating and braking, which is a good thing. It angers people behind me when I crawl off the line when the light goes green though. It will save me roughly $110, so overall, in my mind it is worth it.
    I totally agree the speed monitoring is coming and that it will probably lead to being used against us all for good and bad habits (but is this a bad thing? We all see bad drivers everywhere!). I am still skeptical why they would give me a discount to use it; the (+) and (-) data they get from me must be worth my $110 in savings. Which begs the question: what are they really doing with the data, and what are their true intentions with it?

  3. Emily @ Simple Cheap Mom

    I feel like so much information about me is out there already that if I was offered a big discount on my insurance, I’d snap one of these up. I think it actually would make me a better driver.

    That being said, fashion a tin foil hat, it can’t hurt.

  4. I work for an insurance company, and at present here in Ontario, the devices can ONLY be used to give discounts, not increases – any change to insurance premiums have to be passed by the provincial legislature. As for accidents, it doesn’t matter – the system is no-fault, so even if you are speeding or plow into someone in the wrong lane, you still get your accident benefits coverage. There are some rules around this, if you are impaired for example, you lose certain benefits, but otherwise the benefits are there. Finally, like a lot of things, if you know you are being “watched” you tend to behave better – so if the device actually help you to maintain a better speed or slow down more gently etc, it will likely be to your benefit. I would be much more concerned about information that you have on facebook, google, twitter etc. as opposed to the fact that you did 85 kph in an 80 zone. Also, at the end of the day, insurance companies already use data to estimate your chances of collision (age, gender, how far you drive per year, past-convictions, postal code) so this is just somewhat more individualized. If you are a decent driver, it should help – if you are a bad driver, it may push you to become better.

    1. I remain skeptical about the good nature of insurance companies, as they are a business (a for profit business), this amount of data is going to (eventually) get used to help those profits.

      1. Of course they are a for profit business. By definition, an insurance company that doesn’t make a profit will soon be unable to pay out the claims it owes and will be bankrupt. It’s all a matter of balance. This is where more accurate data comes in. Insurance companies need to take in enough in premiums and investment income to pay all the claims they will have, as well as pay for operations (buildings, staff, heat, etc. etc.) Unfortunately, nobody knows how many claims will occur in a given year, or how costly they may be. Auto claims in particular can vary incredibly from year to year, so companies need to have enough in reserve to pay outstanding claims in “bad” years. The better they can match premiums to risks, the more competitive pricing can be. If they are unable to accurately predict what they need, they will err on the side of caution.

          1. I think the direction is that people who use the devices will get discounts from their regular rates (assuming their driving habits are good – if not they will get no discount). In order to make up the shortfall in premiums, rates for people who will not agree to the additional data will likely start to creep up, as the unwillingness to be “tracked” will be interpreted as a negative. I don’t know that this is true, but it seems logical to me – if you are unwilling to provide the data, you are assumed to be hiding something and will be charged accordingly. It’s like life insurance – if you refuse the health tests, they will still insure you but assume you are unwell and therefore your premium will be high. If you submit your health info and you are “clear” you get a better premium. Anyway, I’m just a worker bee, so this is just my opinion based on what I have read in the industry news. (My own auto provided doesn’t use the extra data collection yet, but I think most larger companies are moving in that direction – if mine does, I’ll sign up as I’m a careful driver so have nothing to hide).

            1. Chris, good points, and well presented, thanks. The “guilt by non-participation” (my words not yours) is an interesting angle, which I think you are spot on as a way for the insurance companies to recuperate any losses on any discounts they give to “good” drivers (I put that in quotes only because I am not sure what parameters makes for a good driver). Opinions and discussions like theses are important to get this into the public eye so Consumers (and service providers) can have a better understanding of things. 🌟

      2. And don’t forget if there is an accident the lawyers for the victim’s side will be demanding all of the info from your on-board tattletale. And even if it doesn’t show anything directly relevant to the case, you can bet they will emphasize ANY records of bad/aggressive driving found. I’m not saying it should matter since you shouldn’t be driving badly ever and therefore being blameless should have nothing to hide, but I still wouldn’t want that additional data out there.

        1. Bette – as to your point – your car already has a “black box” which captures all the data including your speed, braking, when airbags were deployed etc. In addition, if lawyers want to get more information, they will do so by getting forensic accident reconstruction teams out to figure out exactly what happened – all of which come at a high cost, that eventually get passed on to all consumers. So there really is no hiding anyway, you might just as well get the discount for using the company device and hopefully use it as incentive to drive more safely and avoid the accidents in the first place.

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