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It makes sense to share your data with an insurance provider if you are a well-behaved driver. It is well-behaved drivers that subside the insurance cost of rec

It makes sense to share your data with an insurance provider if you are a well-behaved driver. It is well-behaved drivers that subside the insurance cost of reckless drivers.

duxup 2y ago
I think it makes sense to ... just not want to share generally.
stronglikedan 2y ago
> It is well-behaved drivers that subside the insurance cost of reckless drivers. People say this but it's not true. Bad drivers have higher premiums, and no one is subsidizing them. It does make sense for good drivers to share, but only if they have opted in.
- barbazoo 2y ago
  They do pay higher premiums but that might not be enough to pay for a claim. The economics are often such that you price low risk drivers to subsidize higher risk drivers if realistically pricing the high risk drivers is not economical, i.e. would lead to losing business. It's a balance.
  - ryandrake 2y ago
    As another commenter pointed out, if insurance companies had a crystal ball and could perfectly predict each customer's probably of having an accident, and charged them an individualized rate based on future payouts, then we would not need insurance. You could just put those premiums in a savings account and pay for the accident(s) when they happen. The whole point of insurance is it's a shared risk pool. Arguments like "Bad drivers make YOUR rates go up" just serve to pit customer vs. customer while insurance companies profit.
    - weaksauce 2y ago
      as another commenter said, they lose money on the policies and paying out. they make money on investing the policies before they have to pay out the claims.
    - IncreasePosts 2y ago
      That would only be true if people could expect multiple insurance events over their life time. But, if the expected time to an insurance payout for a good driver is longer than their life time, then good drivers will never have enough money in their account to cover an accident that occurs.
      - AnthonyMouse 2y ago
        If you had a perfectly accurate crystal ball and the number of accidents you would have in your lifetime is zero then your account wouldn't need to have any money in it.
        BobaFloutist 2y ago
        It's true that perfectly accurate crystal balls would render insurance irrelevant. It doesn't strike me as that interesting of a revelation, but it is true.
        ryandrake 2y ago
        I guess it's a response to people saying "They need to charge bad drivers more that they do, in proportion to how badly they drive." If insurance could accurately do that, it wouldn't be insurance--it would just be an individualized pre-paid accident savings account.
        AnthonyMouse 2y ago
        More to the point, it erodes the value of the system as insurance. Suppose the insurance thinks that Alice has a 90% probability of an accident and Carol has a 15% probability, so they want to charge Alice six times the premiums of Carol. Then in practice Carol is the one who has the accident and not Alice, because it's not perfect. But the pool Alice is in is much smaller than the other one, so if they were merged, the combined group would only be paying 10% more than Carol does, which would be serving the purpose of insurance -- spreading risk. Whereas if you separate them, Alice is screwed -- even though she isn't even going to have an accident -- because now she has to pay >$7000/year in insurance rather than ~$1300 when you combine these imperfect predictions with smaller risk pools.
ultrarunner 2y ago
Ahh yes, the "if you have nothing to hide" excuse for violating people's privacy.
hypeatei 2y ago
The data collection methods are not foolproof and you can get dinged for "hard braking" even if you aren't. You're basically opting into a temporary rate decrease until they see data coming in that they don't like.
csours 2y ago
Another way to say this: Bad drivers make YOUR insurance more expensive than it should be. I think there are a few problems: 1. The opt in should have been much clearer, and probably should have been a real option not just all or nothing. 2. However, anyone who opts out will have more expensive insurance 3. Which means you have to share data that feels very personal, or be treated like a 2nd class citizen - which feels very icky. 4. Companies are sensitive to customers telling them they are icky, at least until customers get de-sensitized to the ickyness.
deleted 2y ago
[deleted]
cyral 2y ago
If everyone is going to be on their best behavior knowing their data is being recorded, wouldn't Allstate want this to be known?
drdaeman 2y ago
This sounds like the infamous (and flawed) “honest people have nothing to hide” argument, to be honest.
AnthonyMouse 2y ago
There are two assumptions hidden in that which may not be true. First, that the way the insurance company uses the data is accurate. For example, if you work nights, noticing that you drive at night might cause them to raise your rates, because more of the people who drive at night are drunk. You're not drunk, you're just commuting, but now you're getting punished for giving them data. Second, that you know what "well-behaved" is, because people who know they're being tracked will try to conform to what they think will give them a better score. So now you're focusing your attention on strictly adhering to some mental model of what you think the tracking device wants to see in order to lower your rates instead of leaving that attention to focus on actual hazards. Then you end up having to brake rapidly because you notice an actual hazard too late, which makes the tracking device penalize you more than all of your machinations were helping, or even causes you to get into a collision.
fn-mote 2y ago
> It makes sense to share your data with an insurance provider if you are a well-behaved driver. I would like to see evidence of this. My experience: discount for sharing is low, maybe $100/year. My expectation: if I actually get in an accident (1) the data I shared will be used against me; (2) my insurance provider will put me in a high risk pool or drop me. It seems to me that the downside is really high and the upside is not. Is that wrong? P.S. If I actually had faith in all of the companies involved, I would certainly agree with the parent. However, I don't.
- ndileas 2y ago
  I mean, $100 a year is 15% of my bill - I might have to look into the data sharing stuff. I guess if you're already burning money on comprehensive and large deductibles that might not matter as much to you. Rest of your analysis seems spot on. Important to note however that getting in accidents already increases your premiums - I don't really think the data sharing is gonna change that much.
ensignavenger 2y ago
I am not convinced that the data and the way they use it is a reliable indicator of ones driving safety.
rconti 2y ago
First they came for the speeders, but I had nothing to fear, for I was not a speeder...
zerotolerance 2y ago
Ah, the old "if you have nothing to hide you should let us surveil and search you as much as we want" argument.

It makes sense to share your data with an insurance provider if you are a well-behaved driver. It is well-behaved drivers that subside the insurance cost of reckless drivers.

duxup 2y ago

I think it makes sense to ... just not want to share generally.

stronglikedan 2y ago

> It is well-behaved drivers that subside the insurance cost of reckless drivers. People say this but it's not true. Bad drivers have higher premiums, and no one is subsidizing them. It does make sense for good drivers to share, but only if they have opted in.

barbazoo 2y ago
They do pay higher premiums but that might not be enough to pay for a claim. The economics are often such that you price low risk drivers to subsidize higher risk drivers if realistically pricing the high risk drivers is not economical, i.e. would lead to losing business. It's a balance.
- ryandrake 2y ago
  As another commenter pointed out, if insurance companies had a crystal ball and could perfectly predict each customer's probably of having an accident, and charged them an individualized rate based on future payouts, then we would not need insurance. You could just put those premiums in a savings account and pay for the accident(s) when they happen. The whole point of insurance is it's a shared risk pool. Arguments like "Bad drivers make YOUR rates go up" just serve to pit customer vs. customer while insurance companies profit.
  - weaksauce 2y ago
    as another commenter said, they lose money on the policies and paying out. they make money on investing the policies before they have to pay out the claims.
  - IncreasePosts 2y ago
    That would only be true if people could expect multiple insurance events over their life time. But, if the expected time to an insurance payout for a good driver is longer than their life time, then good drivers will never have enough money in their account to cover an accident that occurs.
    - AnthonyMouse 2y ago
      If you had a perfectly accurate crystal ball and the number of accidents you would have in your lifetime is zero then your account wouldn't need to have any money in it.
      - BobaFloutist 2y ago
        It's true that perfectly accurate crystal balls would render insurance irrelevant. It doesn't strike me as that interesting of a revelation, but it is true.
        ryandrake 2y ago
        I guess it's a response to people saying "They need to charge bad drivers more that they do, in proportion to how badly they drive." If insurance could accurately do that, it wouldn't be insurance--it would just be an individualized pre-paid accident savings account.
        AnthonyMouse 2y ago
        More to the point, it erodes the value of the system as insurance. Suppose the insurance thinks that Alice has a 90% probability of an accident and Carol has a 15% probability, so they want to charge Alice six times the premiums of Carol. Then in practice Carol is the one who has the accident and not Alice, because it's not perfect. But the pool Alice is in is much smaller than the other one, so if they were merged, the combined group would only be paying 10% more than Carol does, which would be serving the purpose of insurance -- spreading risk. Whereas if you separate them, Alice is screwed -- even though she isn't even going to have an accident -- because now she has to pay >$7000/year in insurance rather than ~$1300 when you combine these imperfect predictions with smaller risk pools.

ultrarunner 2y ago

Ahh yes, the "if you have nothing to hide" excuse for violating people's privacy.

hypeatei 2y ago

The data collection methods are not foolproof and you can get dinged for "hard braking" even if you aren't. You're basically opting into a temporary rate decrease until they see data coming in that they don't like.

csours 2y ago

Another way to say this: Bad drivers make YOUR insurance more expensive than it should be. I think there are a few problems: 1. The opt in should have been much clearer, and probably should have been a real option not just all or nothing. 2. However, anyone who opts out will have more expensive insurance 3. Which means you have to share data that feels very personal, or be treated like a 2nd class citizen - which feels very icky. 4. Companies are sensitive to customers telling them they are icky, at least until customers get de-sensitized to the ickyness.

deleted 2y ago

[deleted]

cyral 2y ago

If everyone is going to be on their best behavior knowing their data is being recorded, wouldn't Allstate want this to be known?

drdaeman 2y ago

This sounds like the infamous (and flawed) “honest people have nothing to hide” argument, to be honest.

AnthonyMouse 2y ago

There are two assumptions hidden in that which may not be true. First, that the way the insurance company uses the data is accurate. For example, if you work nights, noticing that you drive at night might cause them to raise your rates, because more of the people who drive at night are drunk. You're not drunk, you're just commuting, but now you're getting punished for giving them data. Second, that you know what "well-behaved" is, because people who know they're being tracked will try to conform to what they think will give them a better score. So now you're focusing your attention on strictly adhering to some mental model of what you think the tracking device wants to see in order to lower your rates instead of leaving that attention to focus on actual hazards. Then you end up having to brake rapidly because you notice an actual hazard too late, which makes the tracking device penalize you more than all of your machinations were helping, or even causes you to get into a collision.

fn-mote 2y ago

> It makes sense to share your data with an insurance provider if you are a well-behaved driver. I would like to see evidence of this. My experience: discount for sharing is low, maybe $100/year. My expectation: if I actually get in an accident (1) the data I shared will be used against me; (2) my insurance provider will put me in a high risk pool or drop me. It seems to me that the downside is really high and the upside is not. Is that wrong? P.S. If I actually had faith in all of the companies involved, I would certainly agree with the parent. However, I don't.

ndileas 2y ago
I mean, $100 a year is 15% of my bill - I might have to look into the data sharing stuff. I guess if you're already burning money on comprehensive and large deductibles that might not matter as much to you. Rest of your analysis seems spot on. Important to note however that getting in accidents already increases your premiums - I don't really think the data sharing is gonna change that much.

ensignavenger 2y ago

I am not convinced that the data and the way they use it is a reliable indicator of ones driving safety.

rconti 2y ago

First they came for the speeders, but I had nothing to fear, for I was not a speeder...

zerotolerance 2y ago

Ah, the old "if you have nothing to hide you should let us surveil and search you as much as we want" argument.