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Would you let your insurance company monitor your trucks...


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01-10-2006: Written by InTowMan,


...if you could save money on insurance?

Here is an interesting article on some trials being conducted in the US and UK...what are your thoughts?

For a price, would you let car insurer along for the ride?
The entire technology industry is about to go down the toilet as a bursting real estate bubble crushes the world economy.
But that's OK, because I just found out how much I can save on my car insurance ...

Couldn't resist.

Actually, this is more about how technology is going to change the whole idea of car insurance - and how most of us eventually will let insurance companies monitor every move we make in our cars.

We'll do it for the same reason we happily use those little grocery store discount cards, which let the grocery store companies monitor every item we buy.

That reason is money. Give us a price cut, and we'll give up some privacy. As long as it seems like a fair shake, we're usually on it like seagulls after a dropped Cheeto.

Mass car monitoring is still years away. But it's been one year since the launch of two key tests - one in Minnesota and one in the U.K. - that use technology to track aspects of driving. Based on results of the monitoring, drivers can get discounts on their policies. Both tests are going well enough that they're now being expanded.

And here's an interesting twist: The monitoring seems to be getting people to drive more safely - not because they're afraid of repercussions, but because they're motivated to get bigger discounts. So instead of red light cams and state troopers with radar guns, maybe the way to get people to obey the rules of the road is to pay them to do it.

Big insurer Progressive launched its trial, dubbed TripSense, in Minnesota last August. Customers who sign up are mailed a device the size of a Tic Tac box with instructions on how to plug it into the electronics under the steering column. The gadget tracks only two things: speed, and the day and time a car is being driven.

Customers know upfront what behavior brings discounts. For instance, the less the car's speed is above 75 mph - the top speed limit in Minnesota is 70 - the bigger the rate cut. The discount also is bigger if you don't drive at the most dangerous times, such as right after the bars close on a Saturday night.

Every few months, each customer unplugs the device and uses a USB cord to hook it into a PC and download the information. As a hedge against fears about Big Brother, Progressive allows the customer to see the info and decide whether to send it in. If you've been driving like Batman during a chase scene, you'd get no discount anyway - so hit delete and just pay the standard amount.

About 4,800 Minnesotans are using TripSense. Their average discount is about 12%. Progressive is starting to roll out the test nationwide, hoping to get up to 15,000 participants.

"We're still in research mode," says Progressive executive Dave Huber. In focus groups, the company is finding out some interesting stuff. "Participants are more aware of their own driving," Huber says. "They're certainly more aware of their speed. To a person, they say that when they hit 75, the foot comes off the accelerator."

However, people seem to have less ability to alter when or how much they drive. Like Tracey Cochran of Rochester, Minn., a night-shift lab technician at the Mayo Clinic, who talked with me about trying TripSense. He drives home from work at the riskiest times, so he rarely gets a discount. "I learned I drive well - it's just at the wrong time of day," he says.

When I ask Cochran if he has fears about his privacy, he says, "No, not really."

The test in the U.K., though, pushes the concept of privacy to a whole different level. Using technology developed by Progressive and IBM, British insurer Norwich Union has been testing a program called Pay As You Drive.

The device includes global positioning system (GPS) technology, plus wireless capabilities so the device can constantly send your driving data directly back to Norwich Union. Users don't get to see their info first and decide to send it in.

Norwich Union's system not only monitors when and how fast you drive, it also sees WHERE you drive. If you tend to regularly park behind an adult book store in a dangerous neighborhood, Norwich Union will know. Presumably, the worst consequence is you won't get much of a discount - and such information would never be subpoenaed for, say, a divorce hearing.

Norwich Union recently started testing a way to offer this technology to parents of teenage drivers, who typically have car insurance premiums that look like the budget for a NASA mission.

If the teen has his or her own car, Norwich Union can use its device to charge for insurance based on usage. Drive safely in the daytime and pay about 10 cents per mile. Drive after 11 p.m. and pay about $2 a mile.

A lot of Americans might say they're aghast at Norwich Union's monitoring. But what if you're a very safe driver and you feel that - because actuaries throw you into a pool with all the lane-shifting, speeding, road-raging dregs of humanity - you unfairly pay for others' recklessness?

Would you accept a monitor in trade for a much lower bill? Wouldn't you feel better knowing that the guy who cut you off going 90 mph will have to fork over a lot more cash for the privilege?

What if monitoring coaxes millions of people to behave better on the roads, making everyone safer and ultimately bringing down all insurance costs - and making it less likely that your kid is going to die in a highway pileup?

It seems unlikely that any U.S. lawmaker would ever dare force car monitoring on us, but a decade from now, we might find ourselves buying into it, one person at a time.

Then, like those grocery cards, suddenly car monitors could seem as common and acceptable as house keys.

By the way, did you know that in Finland, taxis have tiny video cameras that monitor the passenger compartment? But we won't even go there. At least not yet.

Kevin Maney has covered technology for USA TODAY since 1985. His column appears Wednesdays. Click here for an index of Technology columns. E-mail him at: kmaney@usatoday.com.



Anaron said: (Now Retired)

Absolutely not! Insurance companies are just looking for another way to avoid paying claims. There is no such thing as saving money on insurance. They are going to make the amount of money they desire regardless. If I remember correctly, a few years back an investigation of the insurance industry showed that insurance companies were making a huge profit on insurance writing but were losing large amounts of money on investments. Increases in insurance premiums were to offset their investment loses. Granted, there are areas in which the insurance companies do lose money but isn't that what insurance is for - to spread the risk over a much larger area? Not any more! If the claims are too much or too frequent, they simple quit writing that particular insurance or inact exhoribant premiums on that segment. Laws requires us to have insurance but is very lax in the requirements of how insurance companies should perform. Each and every year more and more EXCLUSIONS are added to insurance policies. Instead of insurance companies monitoring us, we should be monitoring the insurance companies. It is rapidly becoming the norm for insurance companies to exclude "things" they should be covering. When I became a tow company owner in the early 80's, one policy covered the tow truck, liability, cargo, the complete operation. In the mid 80's, every year the insurance industry would come up with a NEW policy we must have because we were not covered for such and such! Now, I must have a separate policy for tow truck liability, damage to tow truck, cargo insurance to protect while towing, a policy to cover while hooking/unhooking, nonconsent towing, loss of income, etc. etc. Wonder when we will be required to have a policy covering us while we are fueling up? Back in the old days, you would pay a certain unsavory group a "protection fee" to protect your business, most of the time from the very group you were paying. Not much different today!Ron Burnes


Reply by Kelly - Fred's Towing - Stevens Point, WI (No Longer A Member)

I don't know about monitoring our tow trucks, but I do have Progressive Insurance for my personal vehicle. I am participating in the Tripsense program. The paperwork that I approved states that I get $50 for every 6 months I keep Tripsense in my car. Also, it states that the information compiled can not be used to raise my insurance rates. It seemed like an okay deal for me. Maybe at some point I will regret having my insurance company know exactly how far I travel and how fast I do that, but for now, $50 is $50.

Gerry Sienk said:

Insurance companies are in business to make money, not pay claims. I saw a insurance company report back in 1998, the report produced by the insurance companies showed the cost of all claims on autos including medical and rental and underwriting cost was averaged about $226/year per insured auto.
So how many of you were paying that? I know some who are paying for minimum coverge were paying less than a year but that is truly the exception!

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I believe that savvy tow owners monitor their own drivers long before the insurance company has to. That means taking the appropriate measures to hire smart by checking an applicant's MVR before drivers are hired. And, once they're hired, driver behaviors can easily be monitored by simply watching driver speed on dispatch programs or getting out from behind the desk a following their trucks. Programs like California's, "Pull Notice Program", helps to monitor and sometimes eliminate drivers with poor driving history. Owners should be proactive in reducing overall risk through active supervision and on-going training in order to lessen or eliminate costly driver inflicted property damages. But, unfortunately, for every one owner that makes the concentrated effort to protect his risk, too many others don't make an effort until it's too late and their forced to pay higher premiums or be forced out of their market.   R.

Randall C. Resch

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