Jeff Branson, the police chief of Mattoon, Illinois has been tracking a lead-footed driver for nearly two years.
A couple of times, he’s caught the guy doing 70 in a 55. He’s confiscated the vehicle twice but never issued a ticket.
The speed demon just happens to be his 18-year-old son, Chase. Branson monitors his son’s driving habits with a device provided by auto insurance provider State Farm that plugs into the car’s data port and collects information on mileage, braking, turns, acceleration, and what time of day Chase is driving. The device uploads the data to the company, which uses it to rate drivers and offer them a possible discount under the company’s “Drive Safe & Save” program. Information about Chase’s specific location and speed is sent to Branson through an optional monitoring program associated with the device but is not sent to the insurance company.
In-car sensors, or telematics, have become business as usual for major auto insurance carriers like State Farm, Progressive, and Allstate, which say customers appreciate the opportunity to review their performance online and receive discounts on their insurance. The palm-sized devices plug into a car’s data port, the same spot mechanics use for vehicle diagnostics (all cars made since 1996 have the ports.) The devices record information about mileage and speed, which is then used to calculate data about acceleration and braking trends. Some systems also have GPS capability that is relayed to insurance companies for research purposes — or to owners like Branson who opt for driver monitoring.
Though use of these systems is strictly voluntary, the concept doesn’t always sit well with privacy experts.
“Most consumers would be uncomfortable if the insurance company were riding shotgun and measuring how fast they took a turn,” says Carmen Balber, executive director of Consumer Watchdog. “If I live in a neighborhood where kids play in the street a lot, I’m going to slam on my brakes. It doesn’t mean I’m a bad driver.”
The devices are also capable of tracking the time of day or night a car is on the road. For example, late nights are considered a risky time to be driving because there are more high-risk drivers on the road, says Tom Taylor, vice president of advanced strategy for Verizon Telematics, which makes the data-collecting InDrive system for State Farm.
“If you work a night-shift job, you’re going to be on the road after midnight. That could penalize drivers, and we don’t think that’s fair,” Balber says.
Another concern is creeping intrusiveness.
“It’s a slippery slope,” says Paul Stephens, director of policy and advocacy for Privacy Rights Clearinghouse. “They may start out collecting benign information, but what tends to happen is, the insurance company will want more and more data to the point where it becomes extremely invasive.”
Although driver data is typically stored on insurance company servers, it is not shared with third parties unless there is a court order, in which case it can be passed to law enforcement authorities. Some systems, like the InDrive Copilot system Branson uses, collect location data but blur it in a 10-kilometer “geoblock” when transmitting it to the insurance company, Taylor says. Customers also can use the software to create a geofence around areas such as a school or home and receive text or email messages when the car leaves or enters the spot.
A website for State Farm’s InDrive Copilot describes a scenario that lets customers monitor a valet parking their car as they eat dinner in a restaurant. Customers receive a text message if the car strays. “The valet is not stress-testing your engine or going for a joy ride, at least not without you knowing it,” the website says.
“I’m of two minds,” says Jeff Chester, executive director of the Center for Digital Democracy. “On the one hand, we are turning the car into an informant. At the same time, there is a reasonable use, for example, to ensure that children are driving safely. We need to have a national debate and look at best practices and regulation with these data-connected cars.”
Progressive was the first company to use telematics. It filed its first patent application in 1996 and worked on successive iterations to make it more customer-friendly until it rolled out a device called Snapshot in 2011.
Snapshot records miles driven, hard braking, and time of day that the car is in use. Some versions of the device also record location data for research purposes. The company does not use location as a factor in calculating rates at this point, but it may in the future, according to Dave Pratt, general manager of usage-based insurance for Progressive.
“We think it might allow us to build better predictive models. A mile you drive on a highway is probably less risky than a mile on a city street,” Pratt notes because a street has more intersections, thus more possibilities for an accident.
About two-thirds of participants in Progressive’s program earn a premium discount of 10 to 15 percent. Over 2 million vehicles have participated in the program thus far.
But what if a customer’s data reveals lousy driving — can they get a premium increase?
For now, “you either get a discount or you don’t,” says Pratt. That may change, he added, as acceptance of the system becomes more widespread. There are no plans to charge more to drivers who do not participate.
In addition to discounts, tracking systems also offer drivers feedback.
The State Farm InDrive system Branson uses provides drivers with grades on specific tasks like braking and acceleration. The better the grades, the higher the premium discount.
As an incentive, “my wife and I would sit down with our son and go over his grades and show him the discount,” Branson says. The couple helps Chase with insurance payments if he maintains a B average on his driving grades, but not if he slips to a C.
The system seems to be working. “The first year, he had low C’s. But he’s making all A’s and B’s now.”
Image courtesy of Progressive Insurance.
This article by Teresa Meek originally appeared on Forbes PTCVoice.