Do you spend way too much money on your car
insurance? Do you want to save some of that hard earned money for a Koala Bear
or a visit to the salon to cut off that rat tail you’ve had since the 3rd
grade? If so you are in luck and big data is here to help. Progressive and
Allstate are utilizing big data analysis to lower car insurance premiums.
Progressive’s Snapshot and Allstate’s Drive Wise are
the latest attempt to harness the power big data holds. Both of these devices
plug into your vehicle’s OBD-II port and record data directly from your vehicle’s
on board computer. This data is then transmitted wirelessly via cell phone
towers to the company’s data collection center. They are capable of storing
many different parameters allowing the insurance company to create a vivid
digital representation of your driving style. These devices tend to record the
frequency of hard braking, speed, when you drive, and what you drive. Snapshot
says it does not record your position during this time or record if you are
speeding. But, since the data is sent to Progressive via cell phone towers they
likely know your general area at the bare minimum.
There are some limitations to this product though,
that potential customers should be aware of. These devices reward drivers that
drive a limited amount of time between the hours of midnight and 4 a.m. Also,
drivers that frequently don’t drive on freeways or highways as they have a much
lower speed limit. If you have a long commute to work every day during rush
hour this product is most likely not for you. The reasoning behind that is you
get a less desirable rating the harder and more frequently you brake, the
faster you drive, and when you drive. My suggestion is if you fall into that category
then give up on snapshot. If you drive seldomly or just short distances during
none peak hours then this device is a perfect match for you and could possibly save
you some money for that well deserved hair cut. One thing that also must be
considered is what are they going to do with your digital personality?
Will they sell your data to other companies? Will
they keep this data forever? Well this is what progressive has to say about it “We
won't share Snapshot information unless it's required to service your insurance
policy, prevent fraud, perform research or comply with the law. We also won't
use Snapshot information to resolve a claim unless you or the registered
vehicle owner permits us to do so.”(1) They also say this about how long they will
keep your data “It varies depending on
where you live. At minimum, we'll follow the rules established by your state's
department of insurance.”(1) I feel that
the first response is valid and not to offending, but I am not as comfortable with
the last answer. I would feel more comfortable if they were more honest and
upfront about their intentions with all of this very personal data. If they
plan on keeping it for the life of your plan, 10 years, or indefinitely (mostly
likely I would assume) tit should be mandatory for them to explicitly tell
their customers of their intentions so the customers can decide for themselves.
Big data in the car insurance arena is here to stay.
For that matter it is here to stay in the entirety of the insurance market not
just the auto insurance side of the business. Potential customers should be wary
of how your data is shared and what driving habits have to be standard in your
daily driving routine in order to save money. But, for the people that fit into
the categories being monitored, then they are very likely to see a reduction in
the monthly premiums they pay.
Sources:
1. http://www.progressive.com/auto/snapshot-common-questions/
2. http://www.allstate.com/drive-wise.aspx
3. http://www.jeffkramer.com/2012/01/31/the-quantified-car-progressive-snapshot/
As I know, snapshot is a device which can record the activities such as acceleration or brake when you are driving. Progressive said that if you are a good driver, then installing snapshot will save your money from insurance rate deduction. Regarding to your suggestion, seldom and short distance driving drivers will gain benefits from snapshot, but usually these drivers get lower rates due to their low risks. This is totally unfair for those people who drive long and have higher insurance rate. Progressive should have another option for these people.
ReplyDeleteI think what we have to remember about this is that it's insurance. All of these stipulations are based on well-researched observations. The reason they reward those that don't drive between 12 and 4 AM is because that is when they've observed accidents take place. The reason they aren't going to reward those that are stopping and accelerating is because they know that those who are having to do that are more likely to get in an accident. It's a numbers game. My interest isn't how they developed the infrastructure, it's what they results of this will be. Obviously it makes sense for insurance businesses to gain as much knowledge about you as possible to insure you accordingly. Some will benefit and others won't. If this becomes normative and all insurance business do it to increase business, it will be interesting to see how people respond.
ReplyDeleteAlthough I have a very limited knowledge of the snapshot/drivewise devices outside of the television commercials and links you have posted, I feel these devices are similar to all the other data collection strategies companies and technology are providing today. Companies like Progressive and Allstate can benefit from analyzing the data from these devices because as Chris said, they can take a chance on a lower policy income for drivers they deem safer "by the numbers". The scary thing we as customers face is just like with any other social media outlet, or area of our life in which we provide public information about ourselves. Whether it be our average daily commute, speed, braking rate, or something as simple as a tweet or facebook update, we are still on the forefront of public data collection and hesitant about giving away information. Fraud and identity thieves are a common fear in the relative early stages of common internet use and today's technological advances. However, the more we learn about big data and it's applications in this course, the more inclined I am to support devices like this. I can't help but idealize the opportunities to use this data. As mentioned in the summary above, as well as one of the articles, one of the possible reasons warranting the use of your vehicles information would be for compliance with law or law officials. As I see it, with this device, your insurance company could potentially play a vital role in the recovery of a stolen vehicle and possibly important articles and items included.
ReplyDelete