Now that it has had its first wave as a novelty, drivers are starting to look at its other side.
Drivers across the country are already taking part in the usage based insurance programs being offered by a number of the larger insurers, with the promise of an opportunity for significant savings.
However, on closer inspection, some are starting to wonder whether the tradeoff is worth it.
Insurers have crated usage based insurance programs that allow motorists to have their driving behaviors tracked by the companies in order to gain the opportunity to save on their premiums when they prove that they are a low risk. Some drivers are using these programs to save up to 30 percent.
Usage based insurance reports certain information to the insurer to help to decide if discounts are possible.
However, skeptics are now stating that there may be a notable downside to these programs. Usage based insurance programs use a small device that is installed in the vehicle, to obtain various forms of data such as the time of day that the car is used, the number of miles that are driven, and what the motorist’s braking patterns are (particularly in terms of hard braking).
Though this may help to provide information as to the amount of risk that is faced by an insurance company by covering a specific vehicle, skeptics about these programs are saying that the data doesn’t actually reflect an individual’s driving skills very closely.
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Prime examples of this argument use the types of data to explain themselves. For instance, the devices collect the number of miles that a driver puts on the vehicle. The greater the number of miles, the more risk that the individual will be involved in an accident. However, this is only based on the amount of use of the vehicle, not an individual motorist’s skill behind the wheel.
Similarly the times of the day that a car is driven will increase and lower risk of a crash because of the number of other cars that are on the road and due to the fact that it is light or dark outside. This also does not reflect a driver’s actual abilities to control and use the vehicle properly.
Moreover, braking patterns often have more to do with road conditions than they do with a driver’s safe use of the vehicle.
These skeptics state that it would be more fair to market usage based programs as methods of illustrating lower risk in order to achieve better premiums than it is to state that safe and capable driving will lead to smaller bills every month.