Question of the Day – Car Insurance

The post, Why Are Insurance Companies So Interested In Your Car’s Onboard Computer System?, from the Consumerist made me think about a great Question of the Day:

Should insurance companies be allowed to use information gathered from a car’s onboard computer (black box)?

This question may not have much meaning to you now, but I have a feeling that this is going to be a hot topic in the near future. A part of me thinks this would be okay. Another part of me thinks this is really creepy. I mean do I really want an insurance company to be able to check up on me? Would they be able to do this only in case of an accident or would they be able to do this any time they wanted to?

I’m wondering at what point technology will cross the line between being helpful and outright spying?


8 thoughts on “Question of the Day – Car Insurance”

  1. I actually do like the idea of a black box in a vehicle. Should insurance companies have access to it? I don’t think so. What information could it give them? How fast the accelerate, brake, a top speed? Would someone traveling a legal 75mph highway to get to work then end up paying more than someone who drives a side road at 45? Does that really enable you to make a judgment of how likely they are to cause an accident?

    The real factors, like inattentiveness, talking on a cellphone, tailgating, etc…how would a black box read those?

    Why would I like a black box? I’d like it for voluntary use in traffic disputes. Let me make it clear that it should be MY black box. An officer should have no right to force me to submit it. But if I am, say, disputing a speeding violation – my black box can prove that I was within the limit. Or my black box can prove that I was at a complete stop when the guy behind me hit me, or that I wasn’t speeding. That would be good information to have, especially since I have little faith in people to be honest and accept responsibility for their actions (I’ve been in 2 accidents in my life, neither my fault, and both times the other driver outright lied about being at fault until witnesses reported the truth).

  2. Presumably such black boxes would interface with a GPS system to compare a driver’s actual speed to the speed limit on a given section of road. Car insurers would penalize drivers for speeding often, rewarding those who speed rarely or never. As I never speed (never again, officer, I promise), this would save me a ton of money and cost a lot of my friends a whole lot more. I like it!

  3. I think having a black box that would aid accident investigations would be a good thing if it’s limited to that use. It would help in a couple of ways. First, help keep insurance costs down by reducing the amount of litigation over accidents and potentially helping with fraud investigations. Second, car manufacturers could use aggregate information to locate defects that might contribute to crashes in the first place. Keeping insurance costs low and making cars safer directly benefit us as consumers, but the thought of insurers using this information to profile people’s driving habits is a huge concern to me. Unless that issue is addressed I would be very reluctant to support it.

  4. Of course if an objective source of reliably accurate data is available, it will be admissible in court, whether or not you like it. I doubt highly that many people would want their own habits profiled, but many people can probably see the value of profiling “bad drivers” (similar to how sex offender lists are useful). While best intentions mean little for every new piece of technology, insurance companies use as much valid data as they can to determine their risk category. Regardless, policy premium rates are very limited by state DOIs by regulating the ins co’s combined ratios. That artificial control puts a kink in the capitalist circle of supply/demand and keeps the rates pretty tight, IMO.

    Still, I think that we all need to learn a lot more about what this tech specifically is and does before we could make educated decisions about our feelings toward them.

    To the credit of the auto insurance companies, in the article ultimately linked (at Bankrate, not Consumerist), the data was being collected not for general underwriting purposes to predetermine insurance rates, but to determine where fault the lay for an accident (which may impact rates, depending on the underwriters).

    While it may seem reasonable to want to withhold this info from your ins co, keep in mind that almost every policy has a cooperation clause. Strictly speaking, they don’t need to pay you if you refuse to cooperate with them or the authorities; and, more problematically, withholding information when you knew you were at fault could be considered insurance fraud.

  5. No. At best, any black box info should be restricted to a short window around an accident. It shouldn’t be used to see if you drive 70 in 65 zones.

  6. Good article. The idea is really good. This really helps in many and it’s good to have in cars. This might be one way of interface with a GPS system to know at what speed limit the driver is and also it will help the investigation about the accident. This will be an excellent way to get more information about the driving habits of the insurer and this will also makes the insurance costs low.

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