Pay-as-you-go Insurance: What are your thoughts?

[VifferFun]

With the advancement of technology over the last few years, insurance companies across the globe have been considering the implementation of Pay-as-you-go Insurance. With such a program, the insurer installs a device in the insured vehicle that monitors characteristics such as:

• Distance driven
• General locations driven (such as Mississauga, Downtown, Rural, etc.)
• Speed in excess of 120kph
• Hard braking
• etc.

This sounds very "big brother", but the intent is to more accurately charge premium where it is due. The insurance industry is well aware that people frequently lie about the actual usage of their vehicle (such as garage location, annual mileage, commute distance, etc.), and such a device would help alleviate cases of misrepresentation.

The program is already being piloted by Aviva in Ontario (about 6,000 policyholders have volunteered), and is being considered by Manitoba's Government Insurance.

I'm just wondering what your thoughts are on such a program. I'm certain that the main concern regards privacy, which is why the program would likely need to be on a volunteer basis in order for the client to get the best discounted rate. A program such as this could likely help insurers offer reduced rates for people who have multiple vehicles and a single operator, since we could accurately determine the usage of each vehicle and that there are no hidden operators.

Due to the cost of the tracking devices, I don't see this becoming mainstream in the near future, but perhaps it will be seriously considered in the next five years or so.

[FiReSTaRT]

I'm against it due to privacy concerns. I don't want the government or a private corporation to have detailed knowledge of my travel patterns. With that being said, I volunteered a similar sample dataset to an Open Source project

[Hellbound]

Completely against it.

Me: What's with the 2000% increase this year?
Them: Your transponder indicated that you were speeding three times at an average of 118.7KPH and you are now a greater risk to our profits.

[Red1]

Definitely against Big Brother having more control over my life. Why not just implant it in my head so they know where I am at all times?

[tat2]

I'm not a fan of it either. I could also see people being "forced" into using such devices by making rates for those who do not use them prohibitivey high.

[VifferFun]

The intent of such a program is to more accurately price risks. The goal of insurance is to charge people who are likely to make a claim more premium than people who are less likely to make a claim. Such a program would allow an insurer to better distinguish the good and bad risks, and to charge them accordingly. The premiums for good risks would decrease, and the premiums for bad risks would increase. At present, good risks are subsidizing the bad risks, because they contribute more to the pool than they should so that the bad risks can contribute less.

All privacy issues aside, the people who wouldn't like such a program would tend to be the people are are indeed high risk operators, because they don't want their insurer to know how far they drive, where they drive, or how they drive. The insurer would not care if you speed occassionally, but will likely start to care if it is excessive (such as 40kph over the limit).

Anyways, I enjoying hearing what people think of such a program, whether it is positive or negative.

[Spyug]

Definitely a bad idea under the guise of "making for fairer billing", give me a break. Fairer for whom? Definitely not the operator. The first over speed recording and you'll start paying dearly. Just a way of screwing you sooner.

Got to hand it to the insurance companies they definitely do have some slimey shyster types that are good at dreaming up new ways to rifle our pockets. What another load of codswallop.

Bad enough that we have to pay for a full 12 months coverage when they know damn well we only can use about 6 of those actually riding. Now they want to be able to ding you whenever they feel like it. Think there will be any serious rebates if you ride like grannie going to Sunday services. Doubtfulllllllllllllllll !

If any of my insurers come out with that crapola I quit driving , riding whatever. Bastidges!

My 3 cents (inflation).
Spyug

[Mark Duc]

I agree, it'll become an electronic watchdog. I was in sales for a manufacturer that started using a program, that was supposed to aid in the sales process. Once everyone started using it, Baraboom, the CEO used it to start monitoring every second of your time. To paraphrase it in one word, it was "crap"

[Venom01]

should rates not be set by loyalty and a good record? I mean if I ride with the same company for 10 years with little to no minor tickets with no claims (good safety record I guess) be the deciding factor? Im sorry but I can see my rates go up because I was doing 120kph instead of 100kph on the Q.E.W. Say what you will but I don't think that it would be that good FOR ME at least.

[mma01]

This sounds very "big brother", but the intent is to more accurately charge premium where it is due.

No thanks. Anyone who uses their sport bike the way its meant to be ridden will not benefit from the more "accurately charged" premium.

Whats next?

Genetic screening to determine if Im a higher risk for developing cancer? Implantable chip so that the insurance company knows if Ive been enjoying a few too many beers, hanging around smokers or engaging in other higher risk activities?

[VifferFun]

Definitely a bad idea under the guise of "making for fairer billing", give me a break. Fairer for whom? Definitely not the operator. The first over speed recording and you'll start paying dearly. Just a way of screwing you sooner.

Got to hand it to the insurance companies they definitely do have some slimey shyster types that are good at dreaming up new ways to rifle our pockets. What another load of codswallop.

Bad enough that we have to pay for a full 12 months coverage when they know damn well we only can use about 6 of those actually riding. Now they want to be able to ding you whenever they feel like it. Think there will be any serious rebates if you ride like grannie going to Sunday services. Doubtfulllllllllllllllll !

If any of my insurers come out with that crapola I quit driving , riding whatever. Bastidges!

My 3 cents (inflation).
Spyug

The insurance company would remain premium neutral under such a program . . . if they received $1Billion in premium before the program, they would still be receiving $1Billion after the program is instated. What would differ is WHO pays more premium relative to others. If Sally is a high-risk operator and Bob is not, then instead of both paying $1000 into the pool, Sally would pay $1200 and Bob would only pay $800. It is a proposed method of rewarding the good operators and penalizing the bad.

I don't think that the insurers would consider speeding unless it is excessive. If you are the type of person who likes to do the occasional 200kph on a public roadway, then honestly, you aren't the type of person a company wants to insure (for pretty obvious reasons). I'm not saying I am an advocate for the program, but I would like to hear thoughts on it. Some people have complained that they have to pay two premiums if they own two bikes with a single operator, and this is one way of drastically reducing the premium for these people.

The seasonally-rated motorcycle policy has been discussed many, MANY times, and I have even created a sticky on this very topic. If it would make you happier, State Farm could charge you the full policy premium over the riding months, rather than extending the courtesy of allowing you to pay throughout the entire year instead. I will not discuss this issue any further in this thread, because you can read all about it here:

http://www.gtamotorcycle.com/vbforum...ad.php?t=91969

I suggest you read my other posts and understand the product you are buying and how it is priced before posting an uneducated rant.

[VifferFun]

should rates not be set by loyalty and a good record? I mean if I ride with the same company for 10 years with little to no minor tickets with no claims (good safety record I guess) be the deciding factor? Im sorry but I can see my rates go up because I was doing 120kph instead of 100kph on the Q.E.W. Say what you will but I don't think that it would be that good FOR ME at least.

I should make it clear that a program such as this would only be used as one of many rating variables. Your claims history, age, gender, etc. will all continue to be important variables used to determine your level of risk and the premium you pay.

The program would allow insurers to quantify the use of the vehicle. For example, if you only use your car for about 10000kms a year in your suburb, the insurer would be able to verify this and charge you significantly less than someone who drives 25000kms/yr downtown.

[VifferFun]

No thanks. Anyone who uses their sport bike the way its meant to be ridden will not benefit from the more "accurately charged" premium.

And you wonder why most insurance companies aren't interested in insuring Sport Bikes? Since Sport Bikes are designed with the TRACK in mind, the way they are designed or "meant to be driven" is not the same as the way they should be legally driven on the streets.

[mma01]

And you wonder why most insurance companies aren't interested in insuring Sport Bikes? Since Sport Bikes are designed with the TRACK in mind, the way they are designed or "meant to be driven" is not the same as the way they should be legally driven on the streets.

Im not a "model citizen" on my bike by any stretch, but despite that, Im still accident/claim/ticket free after 150K+ km's on the four different sport bikes ive owned so far. Given the choice between my current rates and having the insurance co. charging me based on knowledge of my exact riding habits, hrmm.. I think Im going to have to pick the former. Not everyone grannies around on their litre bike at 10 over max.

[g4getmoney]

The real problem in my opinion is that the device does not take into consideration the flow of traffic.

Going east on 401 past Oshawa doing 100km/h will get you rear ended and killed. The flow of traffic is much more important than speed as it takes into account certain variables. Speed alone is a static number.

All that being said, I wouldn't volunteer only because there has to be a line drawn somewhere. If this is cool, a lot of other intrusions should also be acceptable.

By the way, anyone using their bike to it's real potential won't suffer much as your average speed is what they'll monitor. If you're doing a 30km/h rated turn at 100km/h, so what? You do a lot of highway riding. Going straight and fast is boring to me anyways.

Done long post. Can't wait to take my business away from this stupid Province.

[VifferFun]

Im not a "model citizen" on my bike by any stretch, but despite that, Im still accident/claim/ticket free after 150K+ km's on the four different sport bikes ive owned so far. Given the choice between my current rates and having the insurance co. charging me based on knowledge of my exact riding habits, hrmm.. I think Im going to have to pick the former. Not everyone grannies around on their litre bike at 10 over max.

I'm not advocating that these devices are a good idea for this reason (among others). I like to speed on occasion as well, as long as the conditions allow it and there are no other cars around. I still consider myself a safe operator despite this, and I'm sure that others are the same.

[VifferFun]

The real problem in my opinion is that the device does not take into consideration the flow of traffic.

Valid point.

By the way, anyone using their bike to it's real potential won't suffer much as your average speed is what they'll monitor. If you're doing a 30km/h rated turn at 100km/h, so what? You do a lot of highway riding. Going straight and fast is boring to me anyways.

Actually, the devices don't simply track average speed, but speed spikes as well.

Can't wait to take my business away from this stupid Province.

Ontario isn't at the forefront of this proposition. It actually originated in the UK, and is being studied in Ontario since Aviva is a British company.

[forexman]

I agree, why do the insurance companies additional information, given that they price risk currently by postal code, and the claims that they are experiencing on their overall portfolios.

I agree with the others that tracking my location (not speed) is an invasion of my privacy, and if the insurance companies are going to try and force users to accept the device, then they should also expect a challenge from the Privacy Commissioners office. Besides what guarantees will the insurance company provide that this data they are collecting will a. not fall into the wrong hands (systems being hacked is common) and b. how long will they choose to retain this data?

Also for multi-vehicle policies with only one insured will insurance companies only charge based on what vehicle was driven? i.e. liability will only be based on KM driven and not on both vehicles?

Sorry but tracking my location is unacceptable on a privacy basis.

[eastcoast_gsx]

Its sounds horrible... just as most ideas that seem to spew from the industry.

All touted as a "benefit" for the good... yeah right... christ, to think people try and justify this garbage is hilarious to me.

[VifferFun]

I agree, why do the insurance companies additional information, given that they price risk currently by postal code, and the claims that they are experiencing on their overall portfolios.

The postal code method is not very accurate. Suburban areas such as Mississauga pay high rates because many people living there commute. The people living in Mississauga and working in Mississauga are paying more than they should, because most of their neighbours commute. If the insurer can determine where the majority of your driving occurs, then they can charge you accordingly.

I agree with the others that tracking my location (not speed) is an invasion of my privacy, and if the insurance companies are going to try and force users to accept the device, then they should also expect a challenge from the Privacy Commissioners office. Besides what guarantees will the insurance company provide that this data they are collecting will a. not fall into the wrong hands (systems being hacked is common) and b. how long will they choose to retain this data?

I agree that it would be considered an invasion of privacy. Like all of your other very sensitive information kept by your insurer, it would be held in confidentiality.

Also for multi-vehicle policies with only one insured will insurance companies only charge based on what vehicle was driven? i.e. liability will only be based on KM driven and not on both vehicles?

Yes. Since the mileage would be tracked on the vehicles, the insurer wouldn't have to worry about "hidden operators" using the second vehicle. The device would be able to report to the insurer if both vehicles are being used at the same time. With these devices, you could essentially own three bikes, but pay only one liability premium.