So the Progressive insurance company has a new product that lets you earn a discount by plugging in a little dongle to your car that reports on your driving habits. It raises some interesting questions about how much privacy we’re willing to give up, not to the government, but to a corporation.
At first, it’s very off putting because we can imagine how we could be penalized for bad driving – or even the kind of driving we do every day if they deem it to constitute a bad risk. Of course, there’s only so much data they can collect from today’s cars, like engine RPM and acceleration. And Progressive, at least for now, promises that your rates can’t go up based on the data they collect.
On the other hand, let’s take it a step further. What if they could collect data on things like attentiveness, how well you change lanes, whether you’re prone to jackrabbit starts or abrupt stops? (Such things would be possible if the car’s computer collected data like turn signal activation or if an eye-tracking camera were mounted on the visor or rearview mirror.)
Right now insurance companies base their premiums on general demographic data–age, gender, where you live, what kind of car you drive– plus your driving history, i.e. tickets and accidents. But if they had more data about your specific driving, they could better assess how much of a risk you are. There are some people who are effectively a zero risk. I can imagine they might offered a near-zero premium.
Conversely, a driver who is a higher risk might pay a higher premium. However, what if the insurance company could incentivize bad drivers to become better drivers? Perhaps on a month-by-month basis they could provide feedback to the drivers with ways to improve their driving, maybe with free training. And maybe they would say something like, “If you change these factors next month, we will reduce your premium next month by $50.”
Not only would that help reduce the risks for the insurance carriers from those drivers, but they would also reduce the risk for their good drivers as well.
With a few bits of already available technology, this could be a reality. It would take changes in what data cars record, thus how automakers build them, as well as a change in the regulatory environments in most states, but it’s something to think about.