Auto insurance and privacy

Although it's a slightly tired way of looking at the insurance industry, many people think of insurance as a form of gambling. When you set off in your vehicle, what do you think the odds are you will make it to your destination without being sideswiped by a Chevy? Obviously, you like to think of yourself as a good driver and assume you will always be able to avoid a collision. Unfortunately, as all insurance companies will tell you, the statistics are not on your side unless you live in a remote area of countryside and never see another vehicle from dawn to dusk. In such cases, all you have to worry about is hitting a pothole at night and breaking your suspension, or running off the road in heavy snow because, without anyone to clear it away, you can't actually see where the road is. Accidents can happen to you no matter where you live and drive. That's why you insure. You invest the premium payments against the day when you lose the bet with all the other road users.

So here's the big question for you. Would you agree to fit a device in your vehicle to monitor the way you drive? There's new software called SnapShot and it's hardwired into a tough piece of hardware that plugs into the diagnostic port in your vehicle. It analyzes the way you drive, second-by-second, and calculates your safety score. For example, statistical evidence shows that people who accelerate fast and then brake sharply are more likely to have an accident. The more often you touch the brakes, the less safely you are driving. For the record, engine compression slows you down. If you are always looking ahead and predicting the need to slow, simply lifting your foot off the gas reduces speed. You only need brake if you are getting too close to another vehicle or stationary object. SnapShot considers a range of factors in your driving style and tells your insurance company whether you are more or less likely to have an accident.

If you remember George Orwell's great novel 1984, this is like having Big Brother watching over your shoulder every time you put the key in the ignition. So where's the government in all this? The National Highway Traffic Safety Administration has been researching this technology and it's expected to announce new regulations to force all manufacturers to fit an event data recorder. The idea is a simple one. It records exactly what the vehicle was doing immediately before a crash. So instead of you having to guess how quickly you were driving, whether you swerved or braked, when making a statement to the police, the recorder can give all that information at the touch of a button. This could be a great contribution to road safety but only about 10% of drivers surveyed approve the idea such technology should be mandatory. Even though it might mean lower auto insurance rates, the vast majority of drivers prefer to keep their privacy. Indeed, California already has legislation preventing auto insurance companies from insisting on fitting pay-as-you-go devices. So for now, monitoring is voluntary and safety is taking a back seat.