Average monthly auto insurance premiums have been rising steadily for years and show no signs of stopping. Couple that with the fact that insurers often raise premiums arbitrarily and with little warning, and it’s easy to see that aside from fuel costs, auto insurance is one of the most expensive aspects of owning a vehicle. Luckily, one auto insurance has developed a new way to let drivers cut back on their insurance premiums – with a catch. It turns out that in order to get lower rates, drivers have to allow their insurer to monitor every drive they take. Is a lower monthly auto insurance bill worth the loss of privacy?
The Rhode Island-based HiRoad Assurance Company recently unveiled its somewhat Orwellian plan to track their policyholders’ driving habits with a new smartphone app and reward safe drivers with discounts on their monthly insurance bills. The app must be used on every drive, and scores drivers according to four criteria: speed, braking, acceleration, and cornering. After each drive, the app shows policyholders how much their insurance could be discounted if they maintain their current habits.
Executives at the company admit that their plan is an attempt at social engineering, a way to make the roads safer for all by incentivizing safe driving. Eric Dahl, HiRoad’s vice president of marketing, says the new policy is all about presenting a much friendlier product to customers which focuses on good rather than bad driving behaviors:
We’re trying to look at behavior. We’re trying to reward positive choices. If your risk is reduced, we think you should pay less. We believe the best about you. We think you’re a good person. We don’t want to punish you.
Drivers who have tried HiRoad’s new program says the app has made them more mindful of their driving habits and makes them more aware of how they’re driving every single trip. HiRoad is an affiliate of State Farm, and currently only operates in Rhode Island. Will insurers in other states adopt similar programs?