Discriminating against insurance customers on the basis of things they cannot control, like their age or gender, is not good.
Discriminating against customers on the basis of driving habits that they have control over, like how fast they drive, or how hard they swerve, is completely fine.
If driver A drives safely at the speed limit, and driver B constantly pulls stunts at speeds well over the speed limit, B is much more likely to get into an accident than A. Why should A have his premiums raised just to subsidize B's voluntary driving habits?
By making B pay for the costs of his unsafe driving habits, and rewarding A for his safe driving habits, this feels like a great marketplace improvement.
- driver C who drives fast yet safe (over the speed limit like most drivers) but has to deal with:
- driver D who drives the speed limit in the fast lane, changes lanes without signaling, is essentially clueless, and forces C drivers to navigate around them.
Stunts at any speed is bad, sure, but speed can't automatically be assumed to be stunts. That's the flaw.
If the behavior is not predictively relate increased claims activity, then it wouldn't be penalized. They won't just say "driving 5 mph over the speed limit on the highways raises rates" for no reason. The reality is probably though, at some speed increase above the posted limits there is a relationship with claims activity. If that limit is 4 mph or 10 mph, I think it's fair to charge more.
And can car computers tell if blinkers are on? At some point, changing without signaling is likely to be trackable if it isn't already. Ultimately, clueless driving will leave trackable indicators. This is driving, it's behavior based, and the outcomes are observable.
At any rate, I hope this makes usage-based insurance more common. I currently use MetroMile as my car insurer, which charges per mile of car usage. I'm a city-driver, my miles are insanely low. I'm glad to be benefiting from smarter, behavior-based insurance even if it is in its infancy.
> If the behavior is not predictively relate increased claims activity, then it wouldn't be penalized. They won't just say "driving 5 mph over the speed limit on the highways raises rates" for no reason.
You're assuming the insurance company has perfect information.
That's the problem with all of this. The insurance company isn't in the car. They don't know why you're doing what you're doing.
And the problem is you get what you measure. Changing lanes without signalling will make an accident more likely 85% of the time but make it less likely 15% of the time. If you're penalized 100% of the time then all the people who were doing the right thing in every case will now, in order to keep their insurance rates low, start doing the wrong thing 15% of the time.
Perhaps the insurance companies' models would (with enough data) learn to use 85% as the optimal value, and penalise deviation from that, rather than deviation from 100%
So then people will look at their statistics and start making unnecessary lane changes and so on for the sole purpose of fixing their numbers.
Unless you don't actually tell them what you expect them to do. Then you end up creating a whole new class of crazy folklore about what to do to lower your insurance rates that people follow religiously even when it's obviously irrational.
If you want a computer to decide how to drive then get a self-driving car.
If that limit is 4 mph or 10 mph, I think it's fair to charge more.
The problem is, speed limits in the US are often underposted to raise revenue and/or give the police an excuse to stop almost any driver. Certain studies have shown that drivers doing 4-to-10 MPH over the speed limit are among the safest. The slower ones are often either not paying attention, actively obstructing traffic, or impaired.
I'd be more likely to accept behavior-based insurance rates if they're based on sound traffic engineering principles rather than politics.
> If that limit is 4 mph or 10 mph, I think it's fair to charge more.
But there's already telltales for that: if a driver consistently drives more than 10 mph over the speed limit, they'll eventually get caught and ticketed.
That's where age & experience come into play. If a driver has 20 years of experience with no tickets nor accidents, does any of the other stuff really matter? It's not just observable, it's proof - instead of assumption.
Those telltales are reactive, not predictive. If someone is consistently driving over 10 mph then they should be charged higher rates even if they themselves have not had an accident because they are engaging in quantifiably riskier (to themselves, others, and the claims department) behavior. I'm sure there's people out there that drive like maniacs 90%+ of the time and haven't had an accident, but that doesn't mean they aren't significantly more likely to do so in the future.
Knowing people engage in behavior objectively quantifiable as more risky is also strong evidence of increased level of risk for that driver, not an assumption that the given individual will have a given outcome.
200 people a year die from nuts and peanuts in the US, therefore eating nuts and bringing them to social situations is "quantifiably [risky] (to themselves, others, and the claims department) behavior."
There is a subtlety here in correlation and causation.
>I'm sure there's people out there that drive like maniacs 90%+ of the time and haven't had an accident, but that doesn't mean they aren't significantly more likely to do so in the future.
It's not 'they', it's 'their cohort', and the apparent risk can be very sensitive to the level of detail and factors accounted for - such as nut allergies.
As long as we know the ruler IS bent - because we need some way to charge people appropriately for insurance.
I would argue it is both: the "drive like a maniac" cohort is likely to see a higher incident rate across the population, and that a given individual exhibiting "drive like a maniac" behavior is more likely to have an incident themselves vs. a given individual that does not "drive like a maniac."
This is driving in the open world, not art you create in your basement. Drivers are not fully in control of their environment, and riskier driving behaviors are risky even for fantastic drivers because they cannot account for how others will react to their "mania", to keep the vocabulary consistent.
Mania is quite subjective and increasing the difficulty of this conversation :) Yes, someone I'd call a 100% maniac very likely would have poor individual outcomes as well.
You could chart the relationship between levels of mania and some of the unaccounted factors, like driving skill or restraint. Slippery slope ends up in a trap of having to account for everything for the sake of fairness.
Yes, because there are many people with 20 years of experience with no tickets nor accidents, and they are not all equally likely to file a claim next year. It's not proof or assumption. It's actuarial science.
> If the behavior is not predictively relate increased claims activity, then it wouldn't be penalized
yeah, sure. i totally believe that. ever actually deal with an insurance company? they pretty much do whatever the hell they want unless there's enough people willing to sue in a class action suit. this goes for consumer, business, financial, whatever.
when this becomes mainstream i will go with alternative insurance providers that do not track my driving habits even if it comes at a huge premium.
> they pretty much do whatever the hell they want unless there's enough people willing to sue in a class action suit. this goes for consumer, business, financial, whatever.
Okay fine, please explain to me how you think they would be worse with behavior-based rates than they are today. If they're just looking to bump rates for everyone on a flimsy pretext, there is nothing stopping them from pushing the price envelope as high as they can right now. Well, except the competitive environment they operate in, of course, which isn't going away even with behavior-based rates. They already do whatever they want, so this lets them do it more? It seems unlikely to me, and my early experience is incredibly positive.
Behavior-based rates can at least remove some of the mystery behind rates rather than add to it. Behavior is personally trackable, shareable, and demonstrable. Ultimately, it's a way to increase price discrimination, something I'm a fan of.
Yep, it would penalize those who have high risk markers but are nonetheless actually safer. Seems to be the same problem as charging more to an individual 16 year old who is actually a safe driver.
They already do in the UK, lots of young drivers can only afford to drive if they have a "black box" fitted to their car by the insurer to track their driving behaviour.
I recall that one of the benchmarks used for one of the car-tracking-fob-based insurance policies was how "hard" they were braking and how often, and possibly high acceleration. Repeated hard braking would imply tailgating and distracted driving, and repeated high acceleration would imply generally reckless driving.
I have an Android phone and use the Google app "My Tracks" to record walks I go on. Sometimes the rate that it tells me I'm walking jumps wildly high, even though I walk at a very constant rate. Sometimes it's 2x what it really is.
I would hate to be a good driver and be penalized for bad software/hardware. Given the track record of the auto companies (on which the insurance companies will rely), I think it's a given the software will be really shitty.
The answer to your question is - because speed is not the only thing you can judge "safeness" of driving by.
If the driver A drives at a speed limit, but is drunk, or 90 years old, or playing with their phone all the time, or just got their licence two days earlier, they might be actually much more likely to get into an accident than someone who is going faster than the speed limit but is in perfect mental and physical condition.
I'm not trying to excuse speeding, I'm just saying there's a hundred other factors that are just as important when judging how good a driver someone is. And I feel like insurance companies won't care - they will use the sensor data to say "hey, you accelerate really fast from the traffic lights, that must mean you are a really shitty driver and you have to pay more than other drivers!"
You can absolutely discriminate based on age and gender for insurance purposes, though. Men are charged higher rates than women. Teenagers are charged higher rates than those in their 20's or 30's. A newly licensed 16 year old male will cost more than a newly licensed 26 year old male. My insurance went down when I got married (which is not outside of my control, but is still a protected class).
If there is valid statistical evidence that a certain group of people (male teenagers with divorced parents, single women in their 40's earning more than $60k a year, divorced white men in Massachusetts, whatever) is likely to behave in riskier behavior for whatever reason, you can bet an insurance company somewhere has the data and is charging accordingly.
You can, but you shouldn't. I hate to use the term slippery slope, but it's crazy to me that they still do this. You could easily apply to same logic to race and prison statistics and how officers treat who they're dealing with, who you hire, etc.
Much better to do it on an person by person basis.
What is currently legal to do and what is "right" to do are two different things. GP was talking about what "should" be. Of course, a lot of that is opinion that is up for debate.
I personally agree. I think charging males more (for example) was only done because we had no way of getting more individualized data. It is all very crude and probably will be an outdated concept in 20 years.
*It is illegal to discriminate based on sex for auto insurance purposes in many countries as well as Montana. Insurance companies in most US states take your credit score into consideration (if you don't pay your credit card bill you pay more for car insurance) but this practice is illegal in a handful of states. Massachusetts is one of them, if I recall correctly.
It's a grey area legally, and is usually prevented by ethics committees and industry bodies. Practically, if you collect the information you run the risk of a large anti-discrimination suit down the track.
The usual proxy for race/religion is first name, last name and zip-code - name clustering gives very strong risk differentiation (I crunch numbers for insurance companies).
I get the logic, and I'm personally fine with this approach[1], but there's a tradeoff between privacy and non-freeloading (don't know the technical term). Some types of data collection are so "icky" that people prefer to tolerate free loaders, and this feeling is common enough not to cause the adverse selection problem that forces everyone to accept the loss of privacy or pay impossible rates.
Consider the extreme case: let's say technology allows an external observer to directly read your thoughts as they happen.[2] Hey, people that think worse things are riskier, so what's the problem if they get higher rates? If you don't want higher rates, don't think about cutting through traffic and running red lights!
I just hope no one breaches that database and learns what you think of Suzy...
[1] as a safe driver long resentful of the statistics of my demographic
[2] Because of the "control/choice" issue, assume there's a difference between deliberate and unchosen thoughts and the device only takes the former.
But again, thinking about doing something and actually doing it makes all the difference. You do not have 100% control over what your think. Sometimes you think about something and then decide whether to do it it not by predicting the possible outcomes. I swear i have thought about murdering several people, but of course i will never follow through. And I'm sure everybody does that. It's part of our critical thinking. We think of something and then weigh the pros and cons in our mind and then decide what to do.
See footnote [2], and the problem is that (as with driving styles) there may turn out to be a correlation between how often you think about murder and how often you do it, which can be used to calibrate insurance-risk premiums.
Sure, not every thought about murder leads to murder, and not every red light you run leads to an accident. But people that run more red lights have more accidents, and people who think about bad things more (let's posit) will do more bad things.
"Oh, you only think about murder 3 times a week? Discount!"
Still ready to let your thoughts about Suzy get archived on some hard drive?
All of that does not matter one bit to an insurer. If what you think (or what someone manages to measure of it) can be used to predict damages better than without the data, that allows the insurer to offer those with predicted lower risk a lower premium and thus gain them as customers. It doesn't matter that you possibly know that you would never follow through--if people who think about murdering other people on average are more likely to actually do so and they cannot distinguish between those who do follow through and you, it is rational for them to put you in the same category.
It's not freeloading. The WHOLE POINT of insurance is amortizing risk across a wider range to individuals. If you can correctly predict risk exactly for every single individual then the whole model is pointless.
The "whole point" of insurance does not require vastly different risk classes to be lumped together and pay the same premiums; just the opposite. Someone who is known to carry a higher risk but pays as if they had a lower risk, can reasonably be characterized as freeloading, and that is the sense in which I meant the term -- not the mere sense of "they made a claim".
(Imagine e.g. someone in Florida being rated for hurricane insurance on the mistaken assumption they lived in Kansas, or a cab driver rated as if the car was just used for a daily commute.)
That insight in no way contradicts the principle that a completely predictable event is not insurable, or that insurance allows distribution of the costs of an event across a class.
By that definition though, anyone who comes out "ahead" on their premium is a freeloader. Perhaps a less charged term is needed? Freeloading sounds like this person has done something morally wrong, when in fact that have just used insurance as it is meant to be used.
I've thought about this since my post, and I think a better term for the concept I intended, would be "risk assessment accuracy". That is, you can increase RAA, but at the cost of a loss of some privacy -- that's the dynamic I was describing.
But I still think it's fair to call someone a freeloader if they deliberately get mixed in with a low risk class while knowing they're higher risk.
Edit: And you're right, that in the case of perfect RAA, the concept of insurance breaks down because it means you know people either will or won't experience the insured event.
Generally i think companies leverage data to ratchet rates upwards, not offer unsolicited discounts. Why invest in infrastructure that will reduce profit? That's why when I drive through an ez-pass-only onramp without an ez-pass, they know exactly where my car entered and exited, but they still charge me the max-fare for not having a ticket.
There is massive competition in the auto insurance industry. I was about to say that this would imply that profits wouldn't go up because folks would save 10% by switching to GEICO.
However, I realized a problem.
Currently, all insurers are looking at the same demographic data. If this scheme is put into practice, then insurers will have a proprietary information on an individuals' driving habits, letting them offer discounts to good drivers. This leads to a situation where to switch to a different insurer will always cost more for a good driver, so few drivers will switch. This means that trying to switch insurers will become a signal of bad driving, so insurers will charge more to new customers. This leads to fewer and fewer people switching insurance companies, leading to decreased competition.
In practice, it's the opposite. Switching may be a sign that you are a bad driver but it's also a sign that you are price sensitive which is usually the more important signal. Never switch and you are flagged as price insensitive and therefore a fine candidate for being over-charged.
One solution would be to have laws like Europe has that require companies to provide to each customer all data it's collected about that customer on request Then you could "take your data with you" and show you're a save driver.
Interestingly enough, Geico was started by someone who successfully predicted that government employees would be less risky (the GE stands for Government Employees):
Unless you have access to your own data. Perhaps the insurance companies could be forced to share it upon user request, for example. Then the new company knows everything the old one did.
> Generally i think companies leverage data to ratchet rates upwards, not offer unsolicited discounts. Why invest in infrastructure that will reduce profit?
Because it's a competitive market, and if they don't offer competitive rates, other insurers will take all their market share.
I'm really not seeing how this isn't obvious. If there's a clearly more efficient way of doing insurance rates, companies can either adopt it, or die at the hands of the ones who do.
I agree that insurers will not offer unprovoked discounts. But the accessibility of this data will allow competitors to more accurately estimate accident likelihoods at the individual level, price the insured risks, and undercut the incumbents for a subset of the population.
Unless, of course, the federal government mandates that insurers cover all drivers at the same rates, regardless of pre-existing reckless driving habits.
The sophistication of these devices aren't that high - what constitutes an "unsafe driving habit"? Speed? How hard you turn? Most do some sort of banding around your speed and braking force, which is super crude and doesn't reflect actual driving habits.
Might actually be pretty interesting to see how the random statistics collected correlate with claims. It might indeed turn out fast, aggressive drivers never file claims, so ... that's what should be rewarded.
Sort of the inverse of the self driving car problem - they follow all of the rules, all the time, and are more accident prone, even though they're not at fault for the accident.
Those methods have a lot more refinement, but eventually, most certainly.
I suppose the more important argument is not about "what's the quality of the model?" vs. "what goal is the insurance company trying to accomplish with better risk pricing?"
On many major roads in the US, refusing to exceed the speed limit is unsafe behavior.
With respect to speed, safety comes from matching your speed to that of the surrounding traffic, even if the surrounding traffic is on average exceeding the posted limit. Road-raging vigilante behaviors by drivers intent on enforcing their (incorrect) ideas about safety (i.e., deliberately driving slowly or occupying a passing lane to try to force passing traffic to slow) is actually far more dangerous and in many states is illegal and ticketable.
I'm not saying I don't believe you, but I want to see the law that states you can be given a ticket for driving 65 in a 65 just because traffic in the left lane is going 80.
Many states (including Kansas, where I used to live) have enforceable minimums as well as maximums on major highways. All states can pull over and ticket vehicles for, in the judgment of an officer, traveling at a speed slow enough to be unsafe (witness the stories a little while back about self-driving cars getting into trouble for obstructing traffic by being too slow). In recent years there's been a big push to begin enforcing this on highways, largely because of the rise of road-raging self-appointed "enforcers" who try to force other traffic to obey their personal interpretations of traffic laws.
And in all 50 states it is now some type of infraction to be anywhere but the rightmost lane when travelling slower than other traffic, even if by "slower" you mean "exactly the posted limit". This year-old article has some notes on the left-lane stuff, including the fact that yes, you could be ticketed for doing 65 in a 65 if the passing traffic is doing 80 and your slower driving is interfering with that:
And also points out what was already well-known to everyone except vigilante traffic rangers: that doing only the speed limit, when everyone else is faster, is demonstrably unsafe.
Yeah, but those minimums are usually 40 or 45mph. You can absolutely be ticketed in many states for going at the speed limit in the left hand lane if you're blocking faster traffic although I expect that's fairly rare. I'd have to see someone driving at the speed limit in the right hand lane be ticketed for going slower than the flow of traffic to believe it. That would be a definite man bites dog event.
(a) Notwithstanding the prima facie speed limits, any
vehicle proceeding upon a highway at a speed less than the normal
speed of traffic moving in the same direction at such time shall be
driven in the right-hand lane for traffic or as close as practicable
to the right-hand edge or curb, except when overtaking and passing
another vehicle proceeding in the same direction or when preparing
for a left turn at an intersection or into a private road or
driveway.
(b) If a vehicle is being driven at a speed less than the normal
speed of traffic moving in the same direction at such time, and is
not being driven in the right-hand lane for traffic or as close as
practicable to the right-hand edge or curb, it shall constitute prima
facie evidence that the driver is operating the vehicle in violation
of subdivision (a) of this section.
I suppose it is conceivable that going 65 in the right lane when all the other right lane and merging traffic is expecting to go 70 or 75 could still be unsafe. If there's a big gap ahead of you and a long line of cars behind, it's probably a good idea to speed up regardless of lane (assuming weather's good and your car can handle it).
What's really frustrating and unsafe though is when drivers try to merge onto the freeway going 35 or 45 and traffic is going 70 in a 70 or 75 zone.
One danger is that driver B will respond by driving without taking out insurance if it becomes too expensive. Which would leave people in a bad situation when he finally runs someone over.
I had this exact same discussion with my insurance agent yesterday. I opted out but the agent had trouble understanding (or more likely I had trouble communicating the idea) that once everyone else takes the discount that I will no longer be paying "the normal price" but instead I will be paying a defacto penalty because I don't want to be tracked. "No, it will only ever be a discount!"
When I went to a bank open an online account I asked how and when can I change my password... guy told me "Why would you change it, when you can type anything now". Yea, why would I ever want to change my password that was easy to remember at that point, written on his keyboard, computer and browser?
In California, your auto insurance "base rate" cannot go up by more than a fixed amount (I think 40%?) upon renewal.
This explains why they give me both "Good Driver" and "Exemplary Driver" discounts. I shudder to think what it would look like to lose both discounts and have the base rate go up by 40% all in one fell swoop.
I'm moved back to Oklahoma. The only thing that went up was my car insurance. I thought it was nonsense, but 3 hail storms, crushed car (tree limbs), tornado and 2 hit and run drivers (likely uninsured). I can see why. I pay about 200 more a year. My insurance company has paid 36k to fix my cars the last two years.
My only surprise is that they haven't dropped me. Oh yeah, they paid to fix my rental car when it got crushed by a tree limb while my car was getting fixed from a hit and run.
Geico, as an example, no longer cares if you park your car in a garage (secured) or not. I was explicitly told they no longer consider it statistically meaningful.
Instead, they go off statistics from the area code that your vehicle will generally be parked in and how far your commute to work is.
He wasn't parked in a garage before either. If the cost of insurance is based on risk, the fact that a tree falls on your car doesn't increase your risk. If anything, the risk in the future may be lower as presumably that tree isn't going to fall on the car again.
You are correct, but personally I see it as a good thing. Driving is by far the most dangerous thing an average person does on a regular basis. No other regular activity could easily get you or someone else killed if you stop paying close attention for a second or so, and tens of thousands of people (in the US) do die every year in traffic crashes. Therefore, market pressure towards safer driving is a good thing.
Is there any transparency to the algorithms they use? Do they penalize based on actual statistics, or just someone's moralized opinion of what "safe" driving means?
Unfortunately in the US, the lack of good health insurance options in spite of Affordable Care Act (ACA) means that even after paying the penalty for opting out of soul-crushing health tracking, it is probably still cheaper to work for a company for a company-subsidized health plan than to pay for it all oneself :(.
For mine, participation entails a yearly health screening.
The screening measures blood pressure, BMI, nicotine usage, and cholesterol (via a blood draw).
Depending on the findings, you fall into 1 of 3 tiers, which results in a penalty on every pay check if you don't fall into the numbers.
I know someone who works for Blizzard; if they wear a Fitbit and meet the goal set on it, they get a healthcare discount or a small cash kickback, I forget which.
Of course this is junk, but what's more junk is that your employment is tied to health insurance.
America should have combo of single payer and private. You can get either regardless of your employment status and/or how generous your employer feels like being.
Yeah, I always thought that was insane. If you had a medical emergency when you were out of work (and with no insurance coverage), it would cost the most, precisely when you could afford it the least.
> Alternatively, self-driving cars take over before we're are effectively forced to use tracking
And since most people will use SDCs without owning them, everything will be tracked any way. They'll probably even film you in the car, like all public transport does already. And the people that own SDCs will still submit all their data for training the entire fleet, just like all Tesla drivers do already. At least they will hopefully not get filmed.
Something about the idea of self-driving cars seems to just shut off critical reasoning in some circles, I suspect because a lot of folks in those circles don't want to deal with cars and drive. I do think we'll get to very good autopilots for certain types of roads. But this idea of app-summoned robocars is likely decades out and it's not clear how the rent/own economics will work out even then.
People seem to ignore peak vs average demand, envisioning each car being shared by dozens or hundreds of people, while most cars get used for commuting at similar times so the sharing factor would probably be more like 3-5.
Yeah, I think there are at least a couple somewhat unrelated points.
- Getting from, say, freeway autopilots to more or less arbitrary self-driving under a wide range of road and weather conditions without a competent human even present is going to be a lot harder IMO than a lot of people credit. I actually don't think the NIST autonomy levels are that well thought out. I can't help but think there's a bit of "and then a miracle happens" between 3 and 4.
- Peak demand is definitely an issue. It's not just commuting. Going away for a weekend has definite unidirectional patterns. There are also lots of reasons people will prefer personal vehicles, such as keeping stuff in them.
Agreed, the "cars become autonomous" problems are separate from the "autonomous cars means nobody owns cars anymore" ones.
I'm more optimistic about autonomy. It still seems like a crazy hard problem, but things are advancing so fast right now that it actually seems like they might get there.
But I don't see where the leap from "autonomous cars" to "shared cars" happens. The main obstacle there is simply personal: I don't think people want shared cars. People want autonomous cars (although they probably want the autonomy to be optional) so that hurdle is not a problem on that side.
I suspect that given peak loads, utilizations, etc. there are pretty unfounded assumptions about the economics associated with what would in effect be robo-taxis. Drivers today make, what, $10-15 per hour? So one would need to explain to me how taking that cost alone out of the equation suddenly makes using taxis and limos in place of private auto ownership an economically sensible thing for the majority of people in the majority of places where it isn't today.
The comparison is between a digital computer and an organic one (i.e. a human driver). Furthermore, one can't just assume that a car can drop a person off and head out to the suburbs to wait. That's a huge potential cost in both congestion and energy.
You say that like 3-5 wouldn't already be insanely good. Even 1.1 would be a huge decrease in pollution. 0.4 and it might still be worth it due to fewer casualties and the ability to safely multitask.
I'm not talking about whether it would be good. I'm sure it would be great. I'm talking about whether the introduction of autonomous cars will result in everybody ditching car ownership and using companies like Uber for transportation, which a lot of people seem to think is a given.
Question is... will self-driving car prevent tracking or increase it? Will Ford/Toyota start an insurance business and their cars will track us even more (they do now, yes they have built-in ~sim cards). Will card manufacturers take a deal with banks and government to report on car users so you will get a fee before you get back home?
Would car insurance still be an issue with unowned/rented SDC? I'd assume the manufacturer and possibly lender would be on the hook for the car misbehaving.
Introduce 'discounts' for participating in loyalty programs/giving company plenty of data it can sell. Raise discount prices to current prices (it's not like things are priced too high -- people are buying them as is). Raise non-discount prices to a new premium and milk the few privacy-conscious for all they're worth, getting data from the rest. Grocery stores, car insurance, same plan there's just a lot more regulation about insurance because of discrimination, etc, so it's taking longer.
There is another problem with not using the tracking device in the future. If the companies design the tracker to use CAN bus data then the people with older vehicles(even relatively safer older vehicles) are out of luck. Not even Chrysler completely stopped using their proprietary CCD bus until around 2006.
Hopefully they would design the trackers to be mostly independent by putting the accelerometers in the unit itself.
I came here to say this as well. I admit it, I like to drive hard on occasion. But does the fact that I know the limits of my car's abilities make me a more dangerous driver? Maybe. But I could also cruise ever so gently through a red light, mow down pedestrians at 10 mph under the limit, or smoothly swing wide across the center line into oncoming traffic. Are we tracking things that make dangerous drivers, or tracking things that are easy to track?
It is trivially easy to game too in some cases. My insurer wants to use your smart phone to do the tracking over a period of 6 months after which you no longer have to be tracked. Want to do some street racing every weekend? Just leave your phone at home and go wild. Drive gently on your commute every day until the 6 month period is up and then resume driving like a maniac.
And when they check your cars mileage and it has a boatload more than your phone recorded? After you signed something that agrees you'll always (or almost always) have your phone with you?
If they are tracking via phone, it sounds like they are more interested in the person than the vehicle. So the extra miles could be assumed to be done by other drivers.
If they track the phone, how can they tell if you are driving or just a passenger?
I'm not familiar with the exact device, but strongly suspect the cell phone simply serves as the internet link. Early car trackers had integrated cellular radios, but that can't be cheap.
>> Early car trackers had integrated cellular radios, but that can't be cheap
My TomTom 5000 SatNav, which I bought for like $200 has a permanent connection to the internet in all countries of the world with no monthly fee. It has an integrated SIM card and TomTom just paid some fee so that it can connect to the internet and get traffic updates wherever I am in the world. An even cheaper Kindle 3G also had that. So I guess it must be relatively cheap.
Well, my ISP provided me with a very fancy fibreoptic router and a TV box with a terabyte hardrive which I am pretty sure cost them pretty penny yet I haven't paid anything for either of those things. They make money off me every month though, just like an insurance company would - they give you a fancy box for "free" and make money off you selling you their service.
My insurance company has no idea what the mileage is on my vehicles (they've never asked)...maybe they would require that info before tracking you? I don't know. A few thousand miles discrepancy should be very easy to explain away though.
My insurance company has had a 3rd party auditor "audit" my data every effing 6 months for about 3 years straight. I think they're REALLY suspicious that I only put 3000 miles on this vehicle or 2000 miles on that. I've taken to just pulling up my fuel fillup tracker app every time they call. "Oh, did I say 3000 miles? No, actually, let's say 2853 miles".
Joke's on them, the per-vehicle mileage goes down every time they ask.
I thought you needed hardware you connect to the automobile to do the tracking? My understanding was that the phone and the hardware sync using bluetooth, and the phone uploads data to the insurance companies. Kind of like Automatic: https://www.automatic.com/home/
This is how they track the hard accels, hard breaks etc., since the car puts these events on it's BUS.
I would think a lot of inattentive driving would actually show up on the tracker (abrupt stops, swerves).
I guess inattentive driving would also result in higher accident rates than attentive driving (which they obviously track).
This is certainly another reason to motivate people to think about what sorts of rules and regulations they want in place regarding data collection and retention.
> I would think a lot of inattentive driving would actually show up on the tracker (abrupt stops, swerves).
Those could just as well be samples of very attentive driving. You know, the ones where you didn't hit the tourist stepping backwards off the curb into traffic and the one where you avoided the toddler that suddenly appeared between two parked cars (just two samples from my driving career).
I'd be more wary of people that never have such items while they drive than the ones that do. Circumstances are everything when it comes to making decisions like these.
I think it might be easy. I don't know what the real rates are, but you are suggesting something like 1 adverse event per 10,000 miles (or an even lower rate than that, whatever), to the extent that it is interesting to even bother tracking, I would expect inattentive driving to have a much higher incident rate than that.
Much lower than that, probably more like 1 per 50K or so.
But they do happen and depending on where you live they happen a lot more frequently (Romania, for example, where driving is a bit like a video game but you only get one life. (And for pedestrians it is like 'frogger', and they also only get one life.)
That's why you don't drive 100 mph, mm away from a line of stopped/stopped cars or next to a crowded street corner.
Your examples are ones of exactly the type of behavior insurance companies are trying to disincentivize. Namely, fail-deadly behavior that puts you in a position where you have to be attentive to avoid a collision when other actors don't do exactly as they should. Your error was putting yourself in that position in the first place.
> That's why you don't drive 100 mph, mm away from a line of stopped/stopped cars or next to a crowded street corner.
Wow, you were there?
Forgive the sarcasm but you're speaking as though you were when in fact you are utterly clueless about the rest of the circumstances, and you probably are unfamiliar with the local territory.
> Your examples are ones of exactly the type of behavior insurance companies are trying to disincentivize.
Well, let's just say you are dead-wrong about that.
> Namely, fail-deadly behavior that puts you in a position where you have to be attentive to avoid a collision when other actors don't do exactly as they should. Your error was putting yourself in that position in the first place.
Classic strawman, you made up an extension to the situation and then you valiantly knock it down.
Well done. Really, what would it take to get you to re-phrase your comment into something like:
"Forgive me for asking because I don't understand how these situations came to pass in the first place?"
And then I would have answered:
The tourist was a Japanese dude who was standing right next to one of the most busy streets in Amsterdam, I was doing about 50 kph, right along with the rest of the traffic there (and considerably slower than the taxis overtaking the rest of the traffic) when a guy stepped backwards of the curb while looking through the lens of his camera. Obviously he lost is balance and I stopped the car mere centimeters from his fallen body wrecking a set of nearly new tires in the process. We shook hands and that was that, I'm sure he's going to be a bit more careful in the future while walking and looking through his camera at the same time. The alternative - to swerve - was not an option because of the higher speed traffic in the tram lane and it wouldn't have worked anyway. Good I keep my cars in excellent shape and kudos to whoever designed the brake system on the Citroen DS.
The toddler was a much slower affair, this was in a street with slanted parking (quite common in the old south part of the city), this little tike had escaped from his mum and came out from in between two cars well under mirror height. I wasn't going very fast and fortunately there was a large open space on the other side of the road (super market loading area or something to that effect, I forgot) and so I had plenty of room to swerve when I saw something move. At first I thought it was a dog. An emergency stop there would have been too late, he practically rolled out under the car.
> Well done. Really, what would it take to get you to re-phrase your comment into something like:
> "Forgive me for asking because I don't understand how these situations came to pass in the first place?"
To be honest, I don't think anything would.
Simply stated, I have met too many people (friends, family and coworkers) who tell me well-crafted stories about how they came to be in a car accident, or almost-accident. These stories invariably cast the teller as the victim who could do nothing to prevent the accident (aside from driving more slowly or following at a greater distance). When I later ride with them, I find that they tailgate, speed and roll through stop signs.
Perhaps I was too quick to judge. Maybe you're among the 1% of 'attentive drivers' who actually drive well. I'm just so tired of hearing the excuses of the other 99% that I lumped you in with them.
If you really are that 1%, then I have to say I'm truly am sorry. I hope you are. Because if you aren't, you're probably feeling smug about putting me in my place and will feel justified in driving recklessly in the future.
That's a pretty big straw man. Even at 8mph if a toddler wanders into the road you are going to have a pretty big jolt from slamming on the brakes. If you've never been driving at or below posted and safe speeds in a neighborhood and still had to slam on the brakes because a child's ball bounces into the street (invariably followed by the child), you are quite lucky.
Even with 100 feet to spare, you still slam on the brakes because when a kid wanders into the road, that's what is safest.
Even if I would have braked I would have hit the little guy. So I just swerved to the other side of the road. If it had been packed with cars I would have probably killed him, there was absolutely no way the car was going to stop in time. Very bad experience. I got out very fast to scoop the little man+bike out of traffic and hand him back to his mom, we were both shaking like leafs. They're so quick.
> I would think a lot of inattentive driving would actually show up on the tracker (abrupt stops, swerves).
How do you separate manoeuvres due to driver inattention from the same manoeuvres due to external causes, such as animals or other drivers being inattentive?
(Source; I have been working on the next generation of auto insurance risk models for the United States)
Car (really, driving) insurance is heavily regulated by the government, each state has agency over what information insurers are allowed to include in their risk models, as well as actually auditing the risk models themselves. Insurance nomenclature will refer to these inputs as risk factors. You can get an overview of the rules in California from the Insurance Commissioner's office here [1], and you should be able to find similar overview for your state by googling "auto insurance risk factors <state>"
Usage-based insurance (UBI) is the most recent innovation to be approved for widespread use. It's actually been around for a few years (at least 2012), this article's relevance is mostly about the incorporation of UBI data-gathering sensors directly into new vehicles. The key risk factors UBI focuses on are miles driven, and extreme acceleration/deceleration events. These factors were chosen because they can be easily measured using existing data ports on older vehicles [2], amongst other reasons. The San Francisco-based start-up Metromile [3] is one of the industry leaders.
Ultimately, UBI is limited in that it focuses exclusively on factors specific to the vehicle. As many commenters have identified, "risky" driving behavior is a both a function of how you drive, and how the people around you are driving. The latter effect is much, much harder to capture, but the US Department of Transportation is already engaged in R&D to identify potential risk factors that could be used within the existing regulatory framework.
With the rise in "semi-professional" drivers via on demand ride-sharing services, changes in ownership models via car sharing services, and the rise of semi-autonomous and eventually autonomous vehicles, the mechanics of automotive insurance are going to change a lot in the next few years.
Happy to answer questions as best I can if people are curious.
Sounds like a big NO from the privacy perspective. I hope this gets regulated to the point where these companies cannot offer a discount based on such intrusive tracking.
If you enable a random insurance company to have all data about where exactly you have been every moment of the day, you are giving up a lot of your privacy. And I bet the terms of service will be the standard "Oh, by the way, we are going to share this with all our partners" kind.
Why not regulate their use of the data (as opposed to preventing collection of it)?
I'm pretty sure lots of people will be happy to exchange the tracking data for lower rates, so there needs to be some justification if you want to prevent them from making that choice.
So what are the risks introduced by allowing the companies to make some use of the data? If you ban sharing or sale of the data, you still have the risk of a leak, but the companies could be encouraged to do things like discard the detailed information and only store 'events' or whatever. So discard that you drove on a particular freeway and instead store that you safely passed a medium distance on a limited access road (or store that you swerved abruptly multiple times on that length of limited access road).
> Why not regulate their use of the data (as opposed to preventing collection of it)?
If the Sec of State can't use top secret information appropriately, why should I trust that dozens of faceless agents, programmers, data scientists, actuaries, etc. are all using my data?
Everyone I know carries a cellphone. They track you everywhere you go, even when the gps is off. Ever wonder how Google provides its live traffic info? New cars have gps and cell radios. If they don't already report vehicle position I'm sure they will in a few years. It's probably already used by the three letter agencies. License plate scanning cameras are a commodity now.
Google, AT&T, Ford, and the NSA already know where you are at all times. What's one more?
Sure you could leave the cell phone at home and drive a 20 y/o car but that will become increasingly difficult and conspicuous. "Why are you driving that? Do you have something to hide?"
I don't see this trend as stoppable. I think the best we can do is to implement strong laws about how this information is stored and used. And honestly tracking where everyone drives can do a lot of good. It could allow for much more efficient and fair transportation taxes and eliminiate hit-and-runs for example.
> I think the best we can do is to implement strong laws about how this information is stored and used.
Given that those who would be responsible for enforcing those laws have already demonstrated that they don't mind breaking them themselves, I don't think that that could possibly work out.
> If you don't like it, don't get it. Why should government regulate it away so that people who do like it can't get a discount?
History tells us that scenarios like this are often the first steps towards mandating that everyone comply as the idea is accepted by the masses. Also, what's marketed as a discount today becomes the norm tomorrow and today's norm becomes a premium service in between.
Why the assumption that this data tracking is somehow not an issue for driverless vehicles? Autodrives will still need insurance. They will still be tracked, by google/apple and any number of other "business partners" for a start. Those issuing insurance will still want to keep tabs on vehicle location/speed/movement should the inevitable insurable event occur. The privacy concerns will be the same regardless of who is behind the wheel.
Now the exception to above is perhaps a world where none of these autodrives are privately owned. One might think that in such situations a passenger's movements would be anonymous. They won't be. Even cabs/ubers today keep track of who goes where. Whenever a means of transport is not privately owned, payment will be an issue. And payment leads to individualized tracking.
The further exception to above would be autodrives owned by google and paid for with untraceable cryptocurrency (or cash) ... that's one too many layers of fantasy to debate.
Lol. As if any trip will cost so little that coins are the problem. If the google cars take cash they would become unguarded ATMs full of unmarked 20s ... on wheels... driving alone through bad neighbourhoods.
IMHO the biggest problem on roads is not speeding, it's drunk/drugged driving (most often caused by a lack of adequate public transit at nighttime and cabs being more expensive than the drinks of the night)... and morons who didn't drive for 10 years, are afraid of driving, don't seek help and then fuck up big time when they have to drive (like a distant relative, who hadn't driven for a decade and then had to drive her husband to the doctor. Nearly caused three accidents on the way due to panic).
With pilots we have minimum flight time per year as well as medical requirements. I suggest similar but for cars because people physically unable to drive or people just being morons driving 10 km/h under the speed limit are a risk to everyone else, not just them.
The problem is that the trend to data-driven insurances and other bullshit like this won't help for these cases because computers and especially deep learning models are inherently fallible. A skilled mathematician may look at a risk calculation and check if the premium is adequate (and in case of old people needing their cars to not lose their entire freedom, also "close his eyes")... no way to do so with a neural network. Not to mention that all that data IS going to be abused. If you want to check for public acceptance of government snooping, look at the fan reactions for NCIS episodes. No one ever objects to the portrait that surveillance and hacking is neccessary for law enforcement...
trackers on our phone. trackers in our cars. trackers in our web browsers. and all non-government, non-big brother. this is the definition of soft power and the panopticon, and yet, this comment will likely only annoy most folks...
trackers on your landline phone calls, CCTV face recognition in public places, trackers on your employer's door card system, roadside license plate recognition, tracked usage of payment cards, tracked usage of loyalty cards...
the universe always knows where you are, it's only other people who don't. And soon, they will.
<sarcasm>Yeah I agree that this data is totally safe from government snooping because the likes of the NSA/GCHQ have shown that they are totally unable and unwilling to grab this data as well as the stuff they personally collect...</sarcasm>
The worst part: people lap it up. They love it. Millienials love BigCorp as long as they can continue to check their activity feeds on their phones every hour. And government will do nothing to stop it...why would they? The lobbyists pay too well.
Yeah, I won't be signing up for something like this precisely because this is nothing more than a gimmick that insurance companies will use to maximize their profits.
How does the insurance company know you are hard braking because you are an an inattentive jackass that is texting while driving that suddenly has to brake to avoid a collision vs a safe driver that had to suddenly account for someone in front of them making an improper lane change?
The short answer is they can't but you can bet that they'll use that data to justify raising your rates.
in some ways it probably doesn't matter - if you are an otherwise safe driver that lives in a county full of side-swiping jerks then your rates will go up because you're a higher risk to the insurance company than a safe driver that lives in a county full of other safe drivers. they already do this by considering where you live and work when calculating your rate.
you are a higher risk, because you live around a bunch of jerks. is it your fault? not really, but the insurer isn't there to assign fault, they mitigate risk.
True, I already pay a higher premium due to living in a large city. However, my point is I believe insurance companies will intentional use the data they gather about one's moment to moment driving habits in order to justify premium increases they otherwise couldn't - even for safe drivers.
Depends on how fine-grained the data is. Hard braking and then gradual re-acceleration could mean you getting cut off on the highway, vs. hard-braking prior to a full stop, a wait, and then hard acceleration could mean a tailgater taking off from a stoplight. Also, how regular the occurrences were would also give insight.
Which is fine. I mean, eventually the market itself will punish you for it, because the other people refusing to give up their data will constitute a higher-risk pool of drivers, but if you want to do that then you'll still be free to.
I'd be interested in hearing more from insurance companies on how they calculate "safe" driving. Are they applying a simple model where speed, acceleration, and braking are the only inputs considered? Or are they actively gathering data on many different inputs and correlating them with accident data?
Also, of course, the insurance companies have different incentives than I do as a driver, or, indeed, society as a whole. The the stereotypical clueless/passive/elderly/(dare I say Prius) driver who accelerates incredibly slowly, brakes incredibly slowly, vaguely lists from lane to lane (without signaling) is a terrible driver, and is arguably dangerous to everyone around them. However, they might move so slowly that other drivers are able to anticipate and avoid them, so the accident claims data might not show them as high risk. (although they might tend to make lots of parking lot claims as they 'feel' their way into a parking spot). As a society we don't want to encourage clueless driving; on the other hand (if they can avoid parking lot scrapes), the insurance company might well prefer this driver.
The insurance claims-based model absolutely incentivizes attentiveness, as you can avoid both your own accidents, as those that others attempt to cause. It's certainly not perfect (particularly when paired with things like credit checks), but I'd hate to see drone-like driving preferred over attentive driving.
Another thing to note is that folks with an active interest in driving (engaged, sometimes drive fast, have advanced training, etc) will absolutely avoid these technologies because they're all convinced they'll be punished in the model -- so even if the insurance companies are actively collecting data in an attempt to refine their models, it will have a selection bias.
The main thing these data will be lacking is context. Did I brake hard because I was texting and almost hit the car in front of me? Or did I brake hard because I goddamned felt like it? Were there cars behind me at the time, or was I driving in such a manner that there was no risk of collision? Can it separate inputs that are likely to cause two vehicles to collide, versus inputs that might cause a single-vehicle collision (in which case context doesn't matter)?
Hell, just last week I unexpectedly threw my brand-new car into a full ABS panic stop to avoid some deer. Then again, I guess the insurance company doesn't care why. It's better than a collision, but they'd prefer that I never drive anywhere I might ever get in an accident. Actually, they'd just prefer I don't drive anywhere at all.
It would be so fascinating to have access to a large set of this kind of data. What speed correlates with the lowest accident rate? And in which locales? Would probably see surprising numbers, either far above or below speed limits corresponding to empty roads or bumper-to-bumper traffic.
I've just spent a week here in the UK driving with an insurance company's app which tracks your driving. I got 9.3/10 after the mandatory 200 miles of driving, and wild generally consider myself to be a safe driver on the road - I've done a fair amount of rally driving, and ridden motorbikes for nearly 30 years so I'm reasonably aware of the risks and what can go wrong, plus I drive a van as my daily driver.
What I was aware of during the tracking process was how little the app was aware of - if was sensing acceleration and GPS position, but nothing else, and given there were plenty of times that it wasn't aware of the on road situation (such as someone pulling out in front of me, a road blockage, traffic, etc), I was thinking that it really can't tell everything it needs to - or indeed if I put my indicators on when I change lane, etc. Even if you had a system that connected to this CAN bus to sense such things, the picture would be incomplete.
However, I'm sure that it will be useful to a degree, but there will be plenty of outliers in the data where there are safe drivers who are marked as unsafe and vice versa.
This is one of the steps needed for autonomous cars. At this moment I support it (am open to changing my views). If state laws and regulation are the biggest obstacle against Autonomous cars. Insurance companies are the similar force for them, insuring an autonomous car will be cheap, but if you want to drive your car, the insurance premium is going to be high. In future, manual cars, just like most sports cars today are the dominion of the rich.
I agree, until "Affluenza" type teens start causing fatal accidents with manually operated cars, at which point the legislature will outlaw them entirely.
Right now "affluenza" type teens cause plenty of accidents in both shitty cars and super sports cars, and no one is banning them from driving - as long as they can afford ridiculous insurance premiums they bring on themselves. Don't see that happening later either.
It must be very profitable to be in control of people and to regulate their behavior.
If you can convince people to regulate their own behavior the way you want, all the better. This total surveillance society we're building means more people are looking over their shoulders and not wanting to "get caught" doing something someone else doesn't like. It's pure profits for the plutocrats.
For over a year now I thought "SnapShot" from Progressive was just some absurd marketing gimmick. I didn't realize it was a legitimate product.
Based on the way I see people drive in Hampton Roads, VA I don't think any one would ever use this. There are maniacs at every turn. If you are willing to risk going the speed limit on I-64/262/464 you're likely to get run over.
I'm betting this is going to make people drive worse. Or exacerbate the existing bad drivers into driving worse while the already-good drivers just get the benefits. Sort of like the idea behind red light cameras.
But I'm sure law enforcement will appreciate another massive database.
Insurance is business.
According to province, state etc. law, clients must pay to said business to 'eventually' be able to use it to cover partial costs, deductibles aside.
Business is not mandated by law to any standard which says
client must get a good deal.
Business is allowed to use any input variable in the whole scheme to jack up prices. Business is not mandated to lower them for any reason.
Well, lets give them more input on how to jack up more prices.
This conversation has been had in Ontario, Canada for so long where the insurance rates are the highest in all of Canada. It is not unheard of to pay 5000 to 7000 in Brampton, Ontario. If you move over just to the west, your rates will drop by 2000.
One way to get around this if you're not crazy about the idea would be to put together a peer-to-peer insurance pool. (Discussed on HN here: https://news.ycombinator.com/item?id=10311357)
The problem would be finding the right size and composition of people that you can somewhat trust to be reliable drivers and that use their car around the same amount as you so that the risk profiles are all roughly the same.
I don't know anything special about this subject, someone correct me if I'm wrong.
so I thought the actual role of insurance is to cover the case where the difference from the arithmetic average cost (i.e. average of all cases, consisting overwhelmingly of neutral cases, but with some rare negative possibilities) and the negative event is so large that the rare negative event would be life-changing but the average case is trivial.
for example, it might make total sense for a tiny startup to take out a policy against a total, multi-day AWS outage. This is because that event is basically impossible to occur, but if it did it might bankrupt them immediately. (You can use your imagination as to why this might be.)
So the basic role of insurance is to reduce the variation - get things closer to the arithmetic average case.
But does this work if people don't know the average case?
It is easy to find nationwide accident rates, one could make an educated guess about it. But if insurance companies are tracking your every turn and coming up with a unique offer - what is to say it is remotely fair?
How can anyone tell if their insurance comapny, "You, personally, have driving habits that give you a 10% chance of having an accident this year, and it's remarkable that you haven't had any in the past 8 years you've been driving. You've simply been lucky."
If they're a big-data insurance company, who are you to argue? After all, your friends have been in accidents, you know it's risky.
What I'm getting at is there is huge information-asymmetry if the insurance company has access to a lot more information than the person buying the insurance does!
What's to keep them from selling you tsunami-insurance at Japanese or Californian rates, even though you live in Minnesota?
In the status quo, it's because you KNOW that you live in Minnesota. But if your every choice is being tracked, doesn't that assumption go out the window?
Of course, some kind of a legal requirement to share their actuarial calculations with you would never work, because there is not a company in the world that wouldn't figure out how to lie - you can't get companies to share their profit margins or to keep to a certain profit margin, it's just literally impossible. (It would be like getting your SO not to think of anyone else during sex, no matter how fleetingly. That is just not a possible goal, and I use this analogy because companies' internal calculations are similar to what is going on in someone's head.)
So if private companies can't be held to a profit margin, is the answer state-issued insurance? This would be beneficial in many ways: for example, if someone's behavior is so risky that their average case is pretty bad, then perhaps the state can still choose to subsidize them from less risky customers. A private company might choose to fire them as a customer (or offer them an unaffordable rate.)
The difference is, when prices are close to unaffordable, can insurance companies mislead customers into thinking that it is because they, personally, really are that risky?
How do we stop this? I think the answer is to simply not allow this level of personalization.
The core argument against this would, I guess, be simply that someone else would sell it cheaper. Insurance is extremely easy to switch and there are multiple people offering it. Everyone has to buy it, so there's definitely a huge market, and it's not a monopoly.
> What's to keep them from selling you tsunami-insurance at Japanese or Californian rates, even though you live in Minnesota?
Nothing, but if people are paying way over the odds for it, why wouldn't someone else come in and sell it cheaper?
> So if private companies can't be held to a profit margin, is the answer state-issued insurance?
Quite possibly, but how palatable this is depends on the distribution of the thing you're insuring. Healthcare, for example, is something that seems to work pretty well being state funded. Helicopter insurance might draw more ire.
Cars are a hard one here (UK). They're not universally owned or needed, but are common. And then what type of insurance? Just third party for free? Well then there's still the same issue with all the other options.
> How do we stop this? I think the answer is to simply not allow this level of personalization.
I think ensuring that your data is not held by a single insurer but owned by you is important, not a lack of any data. This should come with the ability to migrate your driving data between insurers, so that anyone can quickly get a quote from any insurer. Otherwise you have a lock-in problem where competing insurers don't know enough about each others customers to be able to offer decent quotes.
@logicallee, I love your point about information asymmetry and trust.
State insurance regulators (not always active, funded, or competent) are supposed to assure that rates are actuarially justified: historical evidence, large enough pools to share risk, causality, and statistical validity. They are theoretically intended to pierce the mysterious veil insurers use for pricing. Here's hoping state and provincial regulators step up their game at least as fast as the insurers.
That's a really, REALLY good question. I wonder how state insurance commissioners let insurance companies not share their data or models? Likely because, at this point, it's used to calculate discounts, not base rates.
Well, the idea is that the market takes care of lies. If a different insurer can correctly predict that a lower premium is sufficient to cover your risk, they should try to sell their product to you at a lower price to gain you as a customer and thus increase their revenue.
Now, that does not mean that it would be fair. Insurance doesn't care about fairness. They balance premiums with modeled risk, not with actual risk.
Because I drive more aggressively than you and I don't make claims or get in collisions. Or make comprehensive claims. Why should I subsidize your claims?
Discriminating against customers on the basis of driving habits that they have control over, like how fast they drive, or how hard they swerve, is completely fine.
If driver A drives safely at the speed limit, and driver B constantly pulls stunts at speeds well over the speed limit, B is much more likely to get into an accident than A. Why should A have his premiums raised just to subsidize B's voluntary driving habits?
By making B pay for the costs of his unsafe driving habits, and rewarding A for his safe driving habits, this feels like a great marketplace improvement.