Posts Tagged ‘auto insurance’
I saw the press release recently from State Farm regarding an update to their Driver Feedback App. The industry is pointing toward telematics as the way of the future, and thought I might investigate and see what the technology could do. I know, this app isn’t really the same thing as the telematics devices used to price car insurance, but I figured it was a good proxy since the systems have to be somewhat similar in terms of the types of data they record, and perform a similar but watered-down analysis and interpretation of the data. This app purports to help you “drive smarter” by following some common sense tips:
- Watch your speed!
- Leave plenty of space between your car and the car in front of you.
- Allow plenty of time for breaking.
- Be sure you’re not taking those turns too tight!
- Don’t take calls or texts while driving.
Ok, so full disclosure here, I’m somewhat of a gearhead. I like cars. I think there is a wonderful aesthetic about taking a machine and having control over your environment. For me, the act of driving isn’t just about getting from point A to point B, but rather an experience in and of itself. So, I’m immediately suspicious of anything in my car that might diminish the fun of the experience.
I was curious to see how these kinds of devices might work, so I decided to try the new app on a few trips. The interface was very simple to use. I just had to make sure my iPhone was lying flat with the top facing forward and press the center of the screen to start the trip.
The first couple of trips I found myself driving extremely cautiously. I accelerated gingerly, took corners very slowly, and started braking very, very far in advance of stop lights. This isn’t a natural way of driving for me, but I wanted to sort of benchmark how the app would respond by driving in an overly cautious manner. Even driving in this matter wasn’t “perfect”, in some aspects were apparently still too aggressive.
For a first trip, I had a score of only 87, despite driving hyper-cautiously. But, since the app doesn’t tell you how a particular score might be achieved, it actually seemed pretty arbitrary. I had two alerts relating to braking, both of which were “light.” Tough to fathom when I didn’t stop fast at all, so I have no idea what the threshold for an alert might be.
On my second trip in pretty dense rush-hour traffic, I got a score of 84. Again, not terrible, but since the scoring methodology isn’t revealed I have no idea how good that is or not. Chicago rush-hour traffic can be pretty crazy, so it shouldn’t come to anyone’s surprise that I had to stop quickly a couple of times. The app always disliked my rate of acceleration from stop lights, so I got an alert at every single one, even though I never pressed more than halfway down on the accelerator. On one of the alerts I was actually bested off the line, by a considerable margin, by a minivan from the mid 1980’s.
I decided on the third trip to just drive the way I normally do, and completely ignore the fact that the app was tracking the trip. That was actually more difficult than I thought it would be because Big Brother was watching and all that, so it was just easier to think of trying to get a lower score rather than a higher one. I once again got a score of 84. On my 26.7 mile trip, I had seven acceleration alerts, one of which was actually rated at “moderate” rather than “light” like all of the others I had received. The moderate alert was actually as fast of an acceleration to 45mph as my car can do as I was trying to avoid a cab careening into my 4th point of contact as I was pulling away from a stop light, but the app doesn’t know that.
The feeling I got from the score on this app was one of being tested but without knowing what I was being tested on exactly. The app knows what I did, and how I did it, but not why. Why is important. Why provides the context for the course of action. If you can’t correlate the what and the how with a why, then any judgment you supply to that course of action is incomplete.
This app represents what I don’t trust about the current analytics craze. I want to know on what basis I’m going to get “dinged”. Unless I’m allowed to know exactly what data it’s recording and exactly how it’s applied, and the assumptions made about “acceptable” performance characteristics, I’m not going to put one in my car unless it’s mandated by law.
When it comes to brand recognition, the Aflac Duck is more than just a mascot, it’s a voice too. Aflac offers major medical insurance to individuals and businesses, but you might be more familiar with its loud, obnoxious duck that stars in all of the commercials. The unmistakable quack which was voiced by Gilbert Gottfried for over ten years is being replaced by Dan McKeague, a sales manager and father of three from Minneapolis. Aflac fired Gottfried after he tweeted inappropriate jokes about the earthquake in Japan. This was particularly offensive to Aflac which does nearly three-quarters of its business in Japan and insures approximately one out of every four Japanese households.
Instead of just replacing Gottfried and hoping no one would notice a new voice, Aflac launched a month-long campaign, held live auditions in major cities across the United States and took online submissions, all in search for the next great quack (I think that has a much better ring to it than American Idol). Not only did this draw attention to the fact that Aflac didn’t agree with Gottfried’s behavior, but it also reintroduced the Aflac Duck to the public, and reinforced the company’s brand image. McKeague was chosen for his vocal embodiment of the duck, according to Aflac, but also because of his philanthropic background and ethical values which are consistent with the company’s culture.
Don’t expect a big change though. Dan McKeague’s Aflac quack is actually quite similar in tone and character to Gottfried. In fact, if you aren’t paying attention you might not even notice. Aflac is planning to debut its first commercial with the new voice immediately, as well as posting it on the company’s Facebook page.
Many P&C insurance carriers now offer some kind of Roadside Assistance Program — you get access to a 24/7 Nationwide Roadside Network in case you have a flat tire, dead battery, lockouts, empty gas tank, etc. Some have no annual fee. I found that auto insurers generally offer cheaper roadside plans than those of motor clubs, (i.e., Motor Clubs plans offer more full service plans for an annual charge — mine was $86/yr). I recently dropped my Motor Club policy once I realized that my Auto insurance policy will now offer Roadside assistance. My speculation is that a lot of you will do the same when your Auto carrier announces they now offer this, too. Why are carriers being so generous? Or are they?
Now for the $64 question: Will one of these roadside assistance claims eventually go on the insurers’ record? It’s not out of the question to be concerned that multiple claims for roadside assistance may cause the insurance company to raise rates or maybe even decide whether or not they want to retain a customer.
So I followed my hunch, researched my thoughts and it was confirmed. I found that car insurance companies report roadside assistance claims to ChoicePoint (a company in Georgia that collects claims information for the auto insurance industry) and using it too much may increase your rates, (see below).
“Using an insurance company’s roadside assistance or towing benefits too often could affect your rates or even your eligibility for coverage. Some auto insurers consider your calls for roadside assistance to be negatives, just like accident claims. One of the nation’s largest insurer says the use of roadside assistance is a very small factor in calculating rates or considering a driver’s insurability. Some insurers report roadside assistance calls made under their policies to ChoicePoint, an Alpharetta, GA. company that compiles claims information for the insurance industry. Other carriers say they report the information but don’t use it in their policy decisions. Another carrier says it doesn’t report usage by members of their Motor Club, but it does report towing claims made under its insurance policies” (Source: ConsumerReports.org)
As my mom always told me “nothing in life is free.” While these programs are great and can get you out of a bind if your car ever breaks down – be aware that there may be hidden risks/gaps in these programs. The consumer may pay by occurrence in some cases and may even pay the ultimate price of increased rates or drop of coverage if the utilization exceeds a certain level. My policy has this program and I’m grateful for it as we ran out of gas on a family trip recently. The Calvary came within 30 mins and we were be back on our way Disney to see Mickey and his friends…
Let me know your thoughts or comments…
So it looks like I spoke too soon. Just when I thought I struck out swinging, I was given another at bat.
After a number of failed attempts to find a pay as you drive service available to Illinois drivers, my insurance agent informed me of a new product from Allstate called Drive Wise that was just launched in the state of Illinois.
First questions… what do I need to do and how is my premium affected? It turns out that Drive Wise is a voluntary program that uses a wireless device that easily connects to my vehicle’s onboard computer. The device tracks my driving habits and calculates a driving score (similar to how Progressive’s Snapshot works). I would receive an introductory discount of 10% off of my premium and could earn up to 30% off based on my driving score.
The initial 10% off is nice, but 30% off had a great ring to it. However, I was a little hesitant with the whole driving score aspect. It sounded a lot like Big Brother would be eyeing me down every time I didn’t look both ways when proceeding through a traffic light (not that I would ever do such a thing), so I inquired further. My agent said “No GPS data is collected and the device tracks only factors used to calculate a driving score, which includes mileage driven, driving time of day, rapid acceleration, maximum speed and hard braking.”
I think I could live with that and it turns out that I can check my driving performance and discount status by going to the Drive Wise website. My renewal is due up in April, so I have a few months to decide, but so far I like what I’m hearing. With limited options in Illinois, this might be a home run…I’ll keep you posted!