Thursday, June 20, 2019

From the P&C Files: Every step you take, every mile you drive....

Hard to believe but we first wrote about driver tracking and insurance over a decade ago:

"A high-tech monitoring device makes it possible to reduce insurance premiums for drivers who avoid jackrabbit starts and slam-on-the-brakes stops...The catch? Bad drivers who take a chance on the program may wind up paying a surcharge instead."

So a reasonable, if potentially risky, trade-off. But that was then, and this is now (11 years on). Surely we've mined collected enough data to determine the efficacy of these programs and devices, no?

Well, thanks to FoIB tsrlbke, the results are in, and they're (generally) positive:

"[A] new business study involving Washington University in St. Louis provides analytical theories showing that such driver-monitoring technology can not only prove beneficial to the bottom lines of some consumers, but also to insurance companies by alleviating moral hazards that affect the risks of accidents."

Which makes sense: careful driving motivated by potential insurance savings is obviously more likely to result in fewer accidents and tickets.

On the other hand, privacy-minded folks might want to take heed of this:

"They install it in your car, and it records all your driving patterns: Where you have been?"

Talk about trade-offs....
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