Car insurance companies are offering customers discounts to let them track their driving habits.
Major auto insurance companies including Progressive (PGR), Allstate (ALL), and State Farm (STATE-FARM), are asking customers to sign off on having sensors in their cars so that the companies can essentially track their every move. The Wall Street Journal reports that the sensors allow insurance companies to see how far people drive, how often they slam on the brakes, and when they exceed the speed limit.
This lets insurance companies recognize which are the safe drivers who are less likely to file a claim. They’re attempting to build towards a future in which they can use location data to more accurately evaluate risk and tailor each insurance policy to fit individual drivers. However, they need customers to consent to having a tracking device in their cars, and a lot of people are cautious.
“I know some people say, ‘What do you have to hide,’ but I don’t want big business or Big Brother involved in my personal life,” one San Diego driver, Shauna Aiken, told the Journal. “It just creeps me out.”
Insurers are offering plug-in devices and smartphone applications, and are even making deals with carmakers to be able to use their in-car computers as tracking devices. They’r trying to temp customers to sign off by offering discounts as high as 30%. Allstate offers a “Drivewise” program that allows tracked customers to accrue points for safe driving habits that can then be exchanged for merchandise, gift cards, or local offers.
So far, about a quarter of new Progressive customers and a third of Allstate customers are giving their consent.
