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I think it's clear that they want to use this to minimize expenditures. The problem arises with how they use the data. The trackers don't intrinsically let th

I think it's clear that they want to use this to minimize expenditures. The problem arises with how they use the data. The trackers don't intrinsically let them get the bad driver rate down, but lets them tune the premiums that those drivers have to pay. Let's use your data; they currently pay ~$1,090 per customer. So for the sake of argument, let's say that they charge $1,100 and keep that $10 in expectation. Now they install GPS trackers, and they can identify two classes of behavior; class A drivers (50% of drivers), who have a 4% accident rate, and class B drivers (50% of drivers), who have a 16% accident rate. The combined rate is still 10%. Class A drivers cost 48 * 1e2 + 2 * 1e4 = $24,800 = $496/driver Class B drivers cost 42 * 1e2 + 8 * 1e4 = $84,200 = $1,684/driver. So this is great -- good drivers pay less, risk profiles are narrowed, etc. Maybe the bad drivers can be given feedback that will tell them what things they can do to minimize their accident rate based on the GPS data, and get some feedback on that -- "drive slower", "stop at red lights", "stop running into parked cars" -- things that both improve the metrics for the GPS and result in safer drivers. But maybe the metric that the adjusters found are "frequently drives in historically Irish neighborhoods", or "drives to fast food restaurants more often". Now things get diciers. And what if the things that the GPS is measuring are not proxies for how bad a driver they are, but how willing they are to settle with cash without involving insurance. Or the correlation is a false one -- it could be that most of the Class B drivers are excellent drivers, as good as Class A, but they have to pay Class B rates because they got lumped in with a secondary association not related to quality of driving. This is a problem with any attempt to bring more metrics to bear in computing insurance rates, but is especially exacerbated by the invasive nature of GPS-based metrics, which can be used as proxies for all sorts of socioeconomic signals that allow open discrimination.

oh_sigh 8y ago
The tracker I have doesn't have any kind of location capabilities, and only tracks certain kinds of events like acceleration rates and speed. So basically as long as you keep it under 85mph and don't slam on the brakes or the accelerator frequently, you get the full discount.
- andrewla 8y ago
  Do you mind saying what kind of device you have? In some cases the only thing preventing other information being used is privacy policies, and the data may be used for gathering metrics to plan future devices. If the data collection is verbose enough, dead reckoning from speed/acceleration information can be used to unmask some non-driving information. It can't be generally unmasked completely, but even small correlations, like "they start slow in the morning but go faster after xx seconds" -> "they live near a freeway" -> <regional information> -> "they are slightly more likely to be rich" -> "they under-report accidents" can be inferred, leading down the same path. This is the sort of thing that I was indicating above -- a lot of "good" drivers can be lumped in with the "bad" ones to make Class B, if you can establish an attributes that appears to be causal but whose accuracy is low.
  - tk75x 8y ago
    It sounds like the one that Progressive used. They would monitor the time of day you drove, your speed, and acceleration/braking. So if you drove fast, late at night, and braked hard constantly, you would not qualify for a discount but at least they didn't raise your rates. And the best (worst?) part was that you only had to have the thing in your car for 1-3 months, I forget which, but when you were done you sent it back and were free to go back to your original driving style.
    - Scoundreller 8y ago
      We could raise gas taxes instead of letting insurance companies capture the profit from punishing inefficient drivers (speeding, not looking ahead and braking instead of easing off accelerator).
abright 8y ago
> Maybe the bad drivers can be given feedback that will tell them what things they can do to minimize their accident rate based on the GPS data The issue here and my concerns with GPS trackers in general is if they are seen as providing valuable insight to how a person drives. This simply is not the case because so much of driving is context dependent. A few weeks ago, my brakes gave out briefly and I swerved sharply into the shoulder of the on-ramp I was on and finally came to a stop in the median between the on-ramp and the road I was trying to merge on to. Purely from GPS data that looks like erratic and dangerous driving when in reality I saved the insurance company money by managing to avoid hitting anything with my car.
- mbrameld 8y ago
  Whoa, what caused your brakes to give out briefly?
  - yardie 8y ago
    Brake fade probably. In stop and go traffic in a hot climate brakes can get slower to respond. The brake pedal feels mushy is the best way to describe it. I've never experienced complete failure in South Florida traffic but I do know they I have to press harder each subsequent time.
    - Scoundreller 8y ago
      AKA: When it’s time to flush your brake fluid. Also: when you have an automatic and can’t depend on your engine for some braking power to take a load off the brakes.
    - mbrameld 8y ago
      If you had left more following distance you wouldn't have had to stop as quickly or as frequently. Either that or you need to maintain the car's braking system better. The point is, the brake fading is almost certainly a result of poor driving or maintenance habits, either of which should result in paying higher insurance premiums.
rcar 8y ago
This is a nice follow-on. The one additional thing I'd point out is that when a Class B driver gets the quote from this carrier of $1,684 but gets a quote of $1,100 from another carrier, they're likely to head for the cheaper option, providing further benefit to the carrier using the trackers. Also, I haven't worked in property/casualty insurance, but my understanding of these trackers is that they don't include GPS capabilities, almost certainly for those sorts of reasons you mention. The risk of bad headlines incentivizes carriers to do what they can to ensure that the false-positive Class B drivers are not correlated with anything potentially sensitive.
- yardie 8y ago
  > my understanding of these trackers is that they don't include GPS capabilities A friend has one of these in her car and it literally has an LED labelled GPS. Which makes no sense because one of the arguments I heard they need GPS to get mileage and speed, which you can already get from OBD.
  - Scoundreller 8y ago
    Not if you install bigger tires ;)
- Tyrek 8y ago
  While insurance is a different industry, the fact that tech companies continue to make decisions that play badly in the media spotlight suggests that 'bad headlines' isn't a huge deterrent in today's world.
- Scoundreller 8y ago
  Poor people (should be) the least likely to care about headlines over cost.

oh_sigh 8y ago

The tracker I have doesn't have any kind of location capabilities, and only tracks certain kinds of events like acceleration rates and speed. So basically as long as you keep it under 85mph and don't slam on the brakes or the accelerator frequently, you get the full discount.

andrewla 8y ago
Do you mind saying what kind of device you have? In some cases the only thing preventing other information being used is privacy policies, and the data may be used for gathering metrics to plan future devices. If the data collection is verbose enough, dead reckoning from speed/acceleration information can be used to unmask some non-driving information. It can't be generally unmasked completely, but even small correlations, like "they start slow in the morning but go faster after xx seconds" -> "they live near a freeway" -> <regional information> -> "they are slightly more likely to be rich" -> "they under-report accidents" can be inferred, leading down the same path. This is the sort of thing that I was indicating above -- a lot of "good" drivers can be lumped in with the "bad" ones to make Class B, if you can establish an attributes that appears to be causal but whose accuracy is low.
- tk75x 8y ago
  It sounds like the one that Progressive used. They would monitor the time of day you drove, your speed, and acceleration/braking. So if you drove fast, late at night, and braked hard constantly, you would not qualify for a discount but at least they didn't raise your rates. And the best (worst?) part was that you only had to have the thing in your car for 1-3 months, I forget which, but when you were done you sent it back and were free to go back to your original driving style.
  - Scoundreller 8y ago
    We could raise gas taxes instead of letting insurance companies capture the profit from punishing inefficient drivers (speeding, not looking ahead and braking instead of easing off accelerator).

abright 8y ago

> Maybe the bad drivers can be given feedback that will tell them what things they can do to minimize their accident rate based on the GPS data The issue here and my concerns with GPS trackers in general is if they are seen as providing valuable insight to how a person drives. This simply is not the case because so much of driving is context dependent. A few weeks ago, my brakes gave out briefly and I swerved sharply into the shoulder of the on-ramp I was on and finally came to a stop in the median between the on-ramp and the road I was trying to merge on to. Purely from GPS data that looks like erratic and dangerous driving when in reality I saved the insurance company money by managing to avoid hitting anything with my car.

mbrameld 8y ago
Whoa, what caused your brakes to give out briefly?
- yardie 8y ago
  Brake fade probably. In stop and go traffic in a hot climate brakes can get slower to respond. The brake pedal feels mushy is the best way to describe it. I've never experienced complete failure in South Florida traffic but I do know they I have to press harder each subsequent time.
  - Scoundreller 8y ago
    AKA: When it’s time to flush your brake fluid. Also: when you have an automatic and can’t depend on your engine for some braking power to take a load off the brakes.
  - mbrameld 8y ago
    If you had left more following distance you wouldn't have had to stop as quickly or as frequently. Either that or you need to maintain the car's braking system better. The point is, the brake fading is almost certainly a result of poor driving or maintenance habits, either of which should result in paying higher insurance premiums.

rcar 8y ago

This is a nice follow-on. The one additional thing I'd point out is that when a Class B driver gets the quote from this carrier of $1,684 but gets a quote of $1,100 from another carrier, they're likely to head for the cheaper option, providing further benefit to the carrier using the trackers. Also, I haven't worked in property/casualty insurance, but my understanding of these trackers is that they don't include GPS capabilities, almost certainly for those sorts of reasons you mention. The risk of bad headlines incentivizes carriers to do what they can to ensure that the false-positive Class B drivers are not correlated with anything potentially sensitive.

yardie 8y ago
> my understanding of these trackers is that they don't include GPS capabilities A friend has one of these in her car and it literally has an LED labelled GPS. Which makes no sense because one of the arguments I heard they need GPS to get mileage and speed, which you can already get from OBD.
- Scoundreller 8y ago
  Not if you install bigger tires ;)
Tyrek 8y ago
While insurance is a different industry, the fact that tech companies continue to make decisions that play badly in the media spotlight suggests that 'bad headlines' isn't a huge deterrent in today's world.
Scoundreller 8y ago
Poor people (should be) the least likely to care about headlines over cost.