As Doc Barnett points out above, the Pay As You Drive system does not track your location.

Cheers,

--Ian

This is a device designed to allow your insurance company to make more money, not save you any.

The assumed correlation of very low mileage drivers with higher accident rates might be broken if this system were put into place. Currently, very young and very old drivers are low mileage, and others live places where they take mass transit or walk, and if they drive at all, learn different (urban) driving skills. If experienced, competent drivers simply drive less, they will retain most of their skills, and their reaction time and vision will be undiminished.

Silly me, I've not owned a car built after 1996 and didn't know they'd finally standardized basic diagnostics. So, the privacy discussion is mostly beside the point.

Spud, you can't determine your "cost-benefit ratio" until this thing is priced. I don't see much point in speculating further on its target market, or specifically, putting down the group of people that might be interested in paying less insurance to drive less. If you're happy with your "low" rates, there's nothing for you to do but ignore this newfangled system and keep paying them. Since you're so confident about the crappiness of the drivers it will attract, you can't be worried about it bleeding off cautious or infrequent drivers from your own risk pool and raising your rates (as I expect to happen). My interest in this is only as a way to wean more of the general public off of driving, insured mile by insured mile, not what any particular person will submit to in insuring himself to cover automobile crashes.

People paying higher rates because of crappy driving records are the target group here as they have the most to gain by submitting to one of these devices. People who already pay low rates I think would pass (generally speaking of course).

And I don't see how they could not track your location and still gain the data they're seeking. Because if they want to know if I'm speeding then they need to know what road I'm on, right? And they're not disposing of that info so quickly -- the first subpoena that arrives and your info is out the door special delivery. Jeez, I already have to leave my cell phone and EZ Pass at home!

The only way a self-contained device could measure all that is with a GPS. An accelerometer could extrapolate velocity and distance by acceleration over time, but that's more complicated and error prone. Since GPS can do all that pretty cheaply now, in a standard package, I'd be surprised if they used anything else. Also, I could swear that in reading about this yesterday something said they would factor in exactly where you drove, if it was on specific roadways that have proven to be crash-prone. Now I can't find that text that I may have imagined. But my money is on a GPS system that the company will claim is only going to be used to get the risk data. Ideally they would state that the exact location data is permanently destroyed after it has been factored into the rate calculation. (And you'll know if that's true the first time a divorce lawyer issues a subpoena. If they are smart they'll avoid that hassle and put the effort into data destruction.)

Secondly it would be interesting to see how the rate structure works. Other companies provide a discount for low millage drivers. I wonder if this is priced purely on the mile and therefore makes insurance a commodity instead.

We shall find out this summer, Spud. Until then I don't understand why the self-proclaimed safest drivers the world has ever seen (here and in the NYT comments) are all so opposed to PAYD. If the current system is so great, the new one will show no advantage and be quickly abandoned.