when i was renewing my car insurance, the rep over the phone clued me in to a new service that they’re offering called “MyRate”. it works like this:
you sign up for the MyRate plan. They send you a piece of hardware that you plug into your OBD-II port. According to the rep on the phone, it tracks three things: time of day that you drive, total miles driven, and statistics on acceleration and deaccelaration (not speed).
every six months or so, that information is uploaded to Progressive who analyze the data and then can either give you a hefty discount (up to 25% i think) or an increase (up to 9%) on your car insurance when it comes time to renew.
it’s an interesting concept, and i’m not sure how i feel about it. the main issue is, of course, privacy and what the balance is between saving money versus handing over detailed information about your driving times and driving habits. i’ve done some basic research online about it and the attitudes are very divided between those that say, “it’s awesome because i’m a safe driver” and those that say, “this has potentially dangerous implications for the mere savings of $30/month at minimum”.
for me, there’s a part of me that feels like it isn’t a big deal, but there’s an instinct that tells me that handing over that data is important and shouldn’t be taken lightly. I remember a long time ago Laurel mentioned something about supermarket cards, about how for the end user it seems harmless enough and saves money on those key money-saving items, but what people don’t know is that those companies can sell the data collected about the groceries that you buy to the likes of health insurance companies who can then offer or modify offered policies based on the data they’ve received.
But again, that sort of instinct – how important is it in the grand scheme of things for that information to be Actually Private, especially given my generally not-so-bad driving habits?
let’s work it out in my head.
maybe the instinct comes from what the big picture message is. In forming a relationship with people or with a business partner or whatever, there’s various rituals that you can do that are designed to inspire and forge trust between both parties. I keep a friend’s secret, i help him/her through it, he develops more trust in me. This company signs a mutually beneficial contract with that company, they both profit, they both are happy, they develop trust in each other. Usually in those instances, the trust has to be some sort of exchange. “Trust us, and we’ll trust you back,” or “give us an opportunity to trust you, and we’ll offer you the ability to trust us back.”
But in this instance, it’s not about mutual trust. Progressive is saying, “give us a reason to trust you, and we’ll give you money.” There aren’t any upfront promises about tangible reasons to trust progressive more as a result of the transaction. it’s as if Bob comes up to me and says, “I have a secret i want to tell you. Can i trust you?” And i come back and say, “i can’t tell you whether or not you can trust me or not, but if you tell me the secret regardless of that, i’ll give you $100.”
Putting it that way makes the MyRate idea seem like an amazingly unfair exchange. If i make no promises on what i do with the information Bob gives me, the allure of the money diminishes in proportion to the importance of the secret. If Bob says, “i peed my pants earlier today”, surely it’s embarrassing and could be the sort of thing i leak onto the internet with no real claim to truth, so the $100 may be worth that. But what if Bob tells me, “i stole money from the cash reigster” or “i raped this girl the other night” or “i killed someone” and tells me exactly where and how? Is the allure of money worth the lack of trust?
In this case, the implications and potential uses of the information we agree to share is likely invisible to us; again, a situation where the allure of the discount supercedes the need to question. Not only that, but the rules behind the terms of the discount and how it works is likely completely in the hands of Progressive as well; it’s not an agreement where i can say, “give me x discount if i only drive x miles and accelerate unsafely only x times a month.” it’s more progressive saying, “we’ll give you a discount in whatever way we see fit. we reserve to change this criteria at any time.”
i need to think about it more, but ultimately it feels like the wrong thing to do. i welcome any thoughts on the matter.
originally posted on darkblog resonate. i prefer any comments there.
They can raise future rates, but you can shop around and find a new insurer.
They’re unlikely to raise rates for people who use the device–the only people who would get higher rates would be people who they no longer want as customers…these higher risk drivers would then switch to an insurer that doesn’t know about their high risk habits.
“mere savings of $30/month”…half of the world lives on less than that.
That is about as strong a commitment to privacy protection that a company can make. You may still be uncomfortable providing Progressive the driving data, in which case MyRate is not for you. Some percentage of the population feels that way, but I believe most do not.
I don’t work for Progressive, by the way. However, I do have a company involved with this type of insurance, which is why I have already researched these details.
i’m still thinking about it. what i worry about is what the implications could be in the future, but as Andrew points out, if i stay on top of any privacy changes, i could always just switch insurers.
but i trust your research to be more accurate than my own (which is none given that this was just an initial reaction post).
thanks for the insight.