The Time Has Come
I got an email from Progressive today. I have my car insurance through them, and they sent me an email six months ago offering me $50 if I chose to install a TripSense in my car. The idea was that the data would help them conduct some research, and every six months, they would email me and request the data.
Well, the time has come, but I’m starting to have second thoughts. In my Service Design course on Monday, we had a guest lecturer from a company called Peer Insights. I can’t find a website for them, but they were written up in Business Week. Peer Insights specializes in trying to create services that result in good experiences for the customer.
An example that they gave was car insurance - the experience is mostly a negative one, because your rate can always go up, but it can never really go down (unless an accident leaves your record, or you turn 25, etc). It’s a punishment model, really: If something bad happens, customers are punished, but they are never rewarded for good driving.
The folks at Peer Insights offered Progressive’s TripSense as an example of fixing the punishment model - by studying how individuals drive, Progressive can adjust the rates accordingly.
Hooooold the phone. I went back and found a little excerpt from my offer letter to start using the TripSense. It goes a little something like this:
So which is it? If Progressive really is trying to move toward a more accurate model, which Peer Insights seemed relatively sure of, then I’m suddenly not feeling a lot of trust for my insurance company. But on the other hand, I’m getting an immediate reward of $50, which is always nice. Should I just take the money, or should I be a little more skeptical?
Peer Insights might have concluded that was the case, but I have my doubts. Seems like there would have been a violation of NDA if that was the actual truth.
Comment by Jenn — April 19, 2006 @ 8:22 pm
Well certainly you should believe them that it is for research. Apparently it is also just a product available for any of their customers who want to “save” on insurance. But I still wouldn’t do it. Won’t it bug you knowing that everything you do is being recorded and scrutinized? I think they should be offering more than $50.
What will this research tell them? People who listen to the rock radio station are more likely to get in accidents than those listening to classical? Once this becomes commonplane, you better not listen to music in your car or your insurance will go up. You slammed on your brakes to avoid hitting a squirrel - insurance goes up. You drove at night - shame on you. You put your seatbelt on after starting your car - insurance goes up. You take the freeway on your way to work (and therevy drive faster than most people) - there go your premiums. It would drive me crazy worrying about all this stuff.
I just wonder if this is leading to a world in which all insurance companies require such things in order to get their insurance. It might make people better drivers knowing that their cars are betraying their every move, but it seems a little big-brother-ish.
Comment by Eric — April 20, 2006 @ 9:28 am
Yeah Eric, you have a really good point. Progressive has a page on how they use the data, and they say that, based on the research, some premiums will go up, and some will go down.
While they say my data won’t affect my premiums, it seems that it is the case that all of the data will affect my premiums. Can I stop this from happening? Probably not. Fifty bucks is probably too alluring for some people to think about the consequences. I guess I’ll dwell on it some more.
Incidentally, the email says that giving the data is optional, but doesn’t say what you should do if you opt out. Huh. Do I just ignore it?
Comment by zaiss — April 20, 2006 @ 12:52 pm
Dude! You drive like a drunken rabbit who’s late for a bunny orgy! When you give them that chip, they’re not going to raise your rates, they’re going to refuse to insure you and send your picture to every insurance company in the state! You’re screwed.
Comment by Vince — April 21, 2006 @ 12:49 am
That bad?
Comment by zaiss — April 24, 2006 @ 10:15 am
Progressive has two different programs using this device that are getting confused here. In Minnesota they have a program where users of this device actually get percentage discounts off their insurance depending on how they drive. The $50 for data program your describing is just that - you collect
the data and give it to them and they give you $50 i.e. your insurance isn’t affected. The type of data being collected is no where as intrusive as one of the posters describe (no they don’t know what radio station your
listening to or where you’re going). The device does collect data like trip time of day, speed (although they don’t know what the speed limit for the road your traveling is)
Comment by Pagat — June 8, 2006 @ 7:46 pm
That’s an interesting point – I hadn’t considered that because the lecturer (who I reasonably believed to represent Progressive) made it sound like Progressive’s sole policy. I guess there’s a reason for NDAs!
Comment by zaiss — June 13, 2006 @ 7:21 pm