January 14, 2016

Privacy and Information Sharing

5. Scenario: Auto insurance discounts and monitoring

Auto insurance

As mobile devices, GPS systems and sensors proliferate there are more and more opportunities for people to be offered goods and services at rates that are tied to their behaviors. For instance, since 1998 Progressive insurance has been offering people the chance to install telematics devices that track their driving behavior and offering discounts to those who perform well. For many years, the monitoring was only tied to discounts for good driving, but starting in 2013, the company began a system that charged poor drivers with higher rates.

Some 45% say they would find the following tradeoff of personal information for benefits to be not acceptable:

Your insurance company is offering a discount to you if you agree to place a device in your car that allows monitoring of your driving speed and location. After the company collects data about your driving habits, it may offer you further discounts to reward you for safe driving.

An additional 37% say it would indeed be acceptable, while 16% say their decision would depend on the circumstances. There are no major differences by gender, age or household income in people’s answers about this scenario.

Those who find this tradeoff acceptable sometimes justified their answer by their view that their current behavior is something worth rewarding:

“My driving is local and I am a safe driver.”

“[This] sounds like a good deal.”

According to one focus group participant: “Driving is a privilege and not a right. With all the monitoring going on while you drive it is only a matter of time until all these vehicles on the road report direct to your insurance agent.”

Those whose answer was “it depends” expressed concerns about the specific types of driving data that might be collected, as well as the time frame for data retention:

I don’t like the idea of someone tracking my driving destinations and knowing my whereabouts all the time. At the same time, I like saving money. It would depend on how much money I could save.

“The recording of location seems unnecessary. Speed is fine [to collect].”

“I am not comfortable having my location tracked. I feel this is an invasion of my privacy and a safety risk.”

“Monitoring driving habits might be fine to allow insurance discounts, but do they really need to know where you are? No privacy. I am an honest person, but I don’t like to be checked up on and the whole world knowing what I do.”

“It would depend on what else they do with the information. As long as the information was kept private, in house and used to offer legitimate discounts – not sold to third parties for exploitation.”

“I would have to know more. I like the part about the speed. But, as far as where a person goes, it is their private personal business. I would agree to allow them to track distance or mileage, but, not actual location.”

“I don’t like the idea of someone tracking my driving destinations and knowing my whereabouts all the time. At the same time, I like saving money. It would depend on how much money I could save.”

“Depends on what security measures are taken to ensure no one but the insurance could have access to the information.”

“Depends on how much money I would save and that it could not increase my cost of insurance if they did not deem me a ‘perfect’ driver.”

“It needs to be for a limited time.”

Those saying this bargain would not be acceptable to them offered a wide range of justifications. Some of these justifications related to their own behavior; others related to their concerns about potential behaviors by their insurance company:

Because if they know that I drive fast, roll through stop signs and red lights, they would do the opposite and raise my rates. I live in the fast lane and want to keep it a secret.

“I speed. …”

“I don’t drive safely.”

“The discounts aren’t worth it.”

“I do not like to be constantly watched and judged.”

“Because I drive like a crazy lady.”

“Because if they know that I drive fast, roll through stop signs and red lights, they would do the opposite and raise my rates. I live in the fast lane and want to keep it a secret.”

“They may be describing it as a benefit to me, but it really feels more like they would be gathering data to deny claims or raise rates – by claiming speeding or some other such trumped-up charge with which there would be no way to defend me as an individual against a giant insurance company.”

“I don’t like anything attached to my car monitoring me.”

“A person cannot control potential driving scenarios. Drivers will get punished when they are encumbered by construction zones in their area and are faced with stop-and-go traffic. Some drivers have no alternative routes to use to avoid these situations. Devices such as ‘Snapshot’ by Progressive punish drivers for driving defensively. These devices punish rather than reward the driver using the device.”

“The insurance company should offer my coverage based upon my driving record/history/demographics, not by playing big brother.”

“I am a safe driver and have not even been in an accident in over 35 years, much less been at fault in an accident. My record should qualify me for a discount, regardless of whether I occasionally exceed the speed limit.”

“Afraid prices would go up.”

“How I drive is my own business.”

“I am a safe driver, but I tend to speed on the highway. I wouldn’t want that to cost me more for insurance.”

“I feel like this information would be used against me if I got into an accident. For example, the insurance agency will look at the data and say that I was speeding right before the accident and claim that the accident was my fault. I also feel as though law enforcement would attempt to use this information in the event of a criminal case.”

“I do not trust insurance companies to do anything good.”

“It’s inappropriate for other parties to be able to track where I am. It’s bad enough that it’s traceable via cellular technology.”

“I pay for insurance at the established rate given my driving record (one speeding ticket in 1967, 48 years ago, at a speed trap in Ohio). I don’t need to have anyone (who I pay) monitor my activities while driving!”

“How long will they keep these records? And could there be legal ramifications if these systems prove that the client has in some way broken the law? It just sounds like an easy way to police the public even more for the sake of a ‘deal.’”

“The speed is fine. But if they hike my rates due to location; for example, if they perceive an area to be unsafe, I wouldn’t think that is fair. Lots of people work/live in high crime areas, and I don’t think they should be penalized for that.”

“I know it would encourage drivers to be safer and that is good, but that is too much like ‘1984’ for me.”

Some people gave answers tied to their particular circumstances with their auto insurance companies:

I tried that once. I am a good driver, and I don’t drive very much at all, and they still did not give me a discount so that makes you wonder!

“They could potentially charge me a premium for exceeding their arbitrary standards of safety, as well. My insurance company already pulls my credit worthiness (how the hell does my FICO relate to my driving ability?) and tracks the VINs [vehicle identification numbers], drivers and driver’s records of all my cars/drivers. My rates just went up 30% in January with *no* explanations as to why. I am changing insurance companies as of the 30th and will be saving $500/year.”

“I actually evaluated such a device offered by my insurance. Unfortunately, the device was easily removed in case the car was stolen, and also the device was not that easily secured under the dashboard. I decided that the reward was not worth the effort.”

“I tried that once. I am a good driver, and I don’t drive very much at all, and they still did not give me a discount so that makes you wonder!”

“I had one of those and only got $1 discount.”

“This option was presented to me by my insurance company. If they can identify how I drive, they can identify where I am, next what I am doing every moment. … I am responsible, doing what is considered appropriate, but I do not have to prove that every moment. Also data can be misinterpreted. If I accelerate to avoid a bad situation, how will it be perceived by a computer chip? If I am driving way under the speed limit and making many stops, am I a poor driver or am I in gridlock or traffic emergency?”

“The idea of monitoring just my driving isn’t true, it would do more than that and it’s the ‘more’ that I can’t be sure of.”

“Its use could be applied in so many other ways. Insurance company should base their rates on claim/accident data alone. They should not directly control my driving or freedom of movement with collecting that kind of data.”

“Allowing the insurer to define what is considered ‘safe’ is like hiring the fox to guard the hen house.”

“If by not having this device your rates would raise dramatically I would do it, but my rates are pretty low already because of my driving record, so I don’t know that it would be necessary.”

“My insurance rates should only be based on no accidents, not penalized by how I choose to drive, based on some set of criteria they deem acceptable.”