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> If you drive Los Angeles freeways you'll be hitting the breaks a lot for random people who cut you off in bumper-to-bumper traffic, but the data will only sho

> If you drive Los Angeles freeways you'll be hitting the breaks a lot for random people who cut you off in bumper-to-bumper traffic, but the data will only show you stomping on the breaks all the time and the insurance company might conclude you're a bad driver because you're not paying attention. That is the correct conclusion though. The insurance company could care less whether you're a bad driver—what they really care is how much of an accident risk are you. Even a good driver frequently caught in LA traffic is a higher risk than a good driver elsewhere. Hence the device is reporting exactly what the company needs.

jdjb 12y ago
I've used one of these devices in my car for the last couple of years and have enjoyed really cheap car insurance as a result (variable based on my driving but usually $30-$35 CAD/month). It is very true that if you are driving in rush hour traffic you have no choice but to appear to be a bad driver. The irony of this is that the accident happening in rush hour is probably minor, yet when I'm barrelling down the highway at a steady pace I appear to be a great driver whereas an accident would be very costly (fatal perhaps). Also they normalize your infractions (sharp breaking, sharp acceleration, speeding, etc) by distance driven so long highway driving is even more beneficial (few infractions, long distances) than traffic jams (many infractions, short distances).
- TeMPOraL 12y ago
  Insurance companies have a strong financial incentive to have their models be well calibrated with reality, so you should expect it more and more with time that when an insurance company thinks you're a bad driver then it really means that your driving sucks.
  - arjie 12y ago
    True, but they'll happily take 10 horrendous accidents over 1100 minor bumps if the bumps cost them a thousand each and the bad accidents cost them a hundred thousand each. Our incentives are different. We would rather have many tiny incidents (up to a limit) than a few life threatening incidents. Therefore, while an insurance company would happily put into place a process that turns a small number of drivers into maniacs and everyone else into placid sheep they'd take it. Not that they are, and it sounds unlikely that such a process can even exist, but it's important to know that our incentives aren't aligned.

jdjb 12y ago

I've used one of these devices in my car for the last couple of years and have enjoyed really cheap car insurance as a result (variable based on my driving but usually $30-$35 CAD/month). It is very true that if you are driving in rush hour traffic you have no choice but to appear to be a bad driver. The irony of this is that the accident happening in rush hour is probably minor, yet when I'm barrelling down the highway at a steady pace I appear to be a great driver whereas an accident would be very costly (fatal perhaps). Also they normalize your infractions (sharp breaking, sharp acceleration, speeding, etc) by distance driven so long highway driving is even more beneficial (few infractions, long distances) than traffic jams (many infractions, short distances).

TeMPOraL 12y ago
Insurance companies have a strong financial incentive to have their models be well calibrated with reality, so you should expect it more and more with time that when an insurance company thinks you're a bad driver then it really means that your driving sucks.
- arjie 12y ago
  True, but they'll happily take 10 horrendous accidents over 1100 minor bumps if the bumps cost them a thousand each and the bad accidents cost them a hundred thousand each. Our incentives are different. We would rather have many tiny incidents (up to a limit) than a few life threatening incidents. Therefore, while an insurance company would happily put into place a process that turns a small number of drivers into maniacs and everyone else into placid sheep they'd take it. Not that they are, and it sounds unlikely that such a process can even exist, but it's important to know that our incentives aren't aligned.