Ford Motor Company is partnering with State Farm insurance to provide driving data of Ford customers. The goal is to verify which drivers are low-mileage customers and to reduce their insurance rates. In this case, low-mileage translates into less than 1,000 miles driven per month.
It is logical to assume that those who spend less time exposing themselves to the dangers of public roads will also have fewer insurance claims. In a sense, this is an even tradeoff. The insurance company verifies that the policy holder does not drive much and in return provides a discount. Ford’s financial stake in this arrangement has not been disclosed.
State Farm is not the first insurance company to tap into vehicle data to monitor policyholders. Progressive Insurance offers a similar service. Instead of tying themselves to a singular make, the company sends enrollees a device that plugs into the car’s OBD II sensor. The device, termed “Snapshot”, monitors driving habits for an initial 30-day period. This baseline assessment is used to adjust the driver’s insurance rate, which the company claims will not be increased due to poor driving habits. After six months, drivers send the device back to Progressive and stay at their current rate. Information collected by Snapshot includes vehicle speed, time of day and distance drive. The company provides discounts to drivers who don’t drive at night, brake slowly and drive fewer miles.
According to Ford’s press release, State Farm will only collect the actual mileage driven by its members. One does wonder if there might be additional information that the insurance carrier could utilize to set insurance premiums. Location information, coupled with speed data, would make an excellent variable in setting rates. As would seat belt usage. Presumably, the driving public would have to be informed of such data gathering practices. Then again, this appears to be a partnership between two corporate entities with the drivers as third-party beneficiaries.
This leads to an interesting question: “Who owns my driving data?” Most automobiles for sale in the US already include Event Data Recorders (EDR). These devices collect all sorts of good data that can be used by police and insurance companies in analyzing car crashes. Thus far, auto manufacturers have been quietly collecting the data without disclosing it to third parties. Read your car insurance contract closely, because according to the Insurance Institute for Highway Safety, only few states prevent insurance companies from requiring policy holders to provide access to this data.
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