Why Insurers Switch To In-Car Monitoring
From an automotive insurance standpoint, UBI has a strong appeal for parents and for those who seek out discounts on everything. Anyone who clips coupons can see the appeal for an instant 10% discount for plugging in a tracker, and the prospect of a 30% discount for good driving on renewal makes good sense for the household budget.
Feedback from telematics systems, which usually gets delivered to a smartphone app or sent to you in an email, can also let you know how you are doing as a driver, what changes to make, and the type of discount you can expect on renewal. Steady acceleration, gradual braking, driving the posted speed limit, and thinking happy thoughts (only happy thoughts, or you will make Billy mad and he will wish you into the cornfield) is noted by the plug-in telematics device under your dashboard, which reports all that data and more to a big central server somewhere in a bunker in Utah and offers you better rates for being a good citizen. Just don't be surprised if someone approaches you years later with a dossier containing print-outs of vehicular GPS locations that you would pay good money to prevent your spouse from seeing.
Auto insurers appreciate UBI insurance data from in-car devices because it adds a whole new dimension to understanding a person's risk profile. The current model of pricing and risk assessment relies on a kind of legal discrimination based on age, credit rating, neighborhood, marital status, and even the grades you get in school. All of these can be challenged in court, or are controversial in that a low credit rating does not necessarily make you worse driver, being married does not make you safer on the road, and being young does not automatically make you a speed demon. A device that can see how you drive, and includes accelerometers and other fancy GPS tools to see how fast you are going (and the car speedometer will also be happy to rat you out to the telematics tool) and how often you drive will go a much longer way than the extended actuarial guesses that have been the basis of the industry since the 1850s, when the first powder wagons were insured by the Mercantile Assurance Group out of Schenectady New York.
People Already Paying Low Rates May Resist
Moreover, the drive to give up privacy for discounts may not ring well with the upper-aged demographic that already gets discounts because they are the proverbial little old ladies who only drive to church on Sundays, but for everyone else in the oversharing generation, it is no problem. They already will tell you what they had for lunch, the things they do at parties, and how they feel about the latest incident to get distorted through the social mindset of an ignorant mob for two guaranteed sets of polar-opposite knee-jerk reactions that are wholly divorced from a search for the facts of what actually happened. People who don't take more than a second to decide their option about murky circumstances in a complex context are ideal for plugging in tracking devices into their automobiles for insurance discounts one day, then decrying government surveillance the next. So long as people can enjoy both wings of their McPhilosophies, and argue about a small tree when the whole forest is on fire, then they don’t mind saving a few bucks whilst plugging into the Borg collective.