Update on Car Black Box Surveys

3 Aug ’05

In March I blogged the new Aviva Autograph program – a black box “pay as you go” car insurance program that received a lot of press when it launched in Ontario.

Today USA Today reports on some results of driver surveys of similar programs. Gist:

And here’s an interesting twist: The monitoring seems to be getting people to drive more safely — not because they’re afraid of repercussions, but because they’re motivated to get bigger discounts. So instead of red light cams and state troopers with radar guns, maybe the way to get people to obey the rules of the road is to pay them to do it.

Big insurer Progressive launched its trial, dubbed TripSense, in Minnesota last August. Customers who sign up are mailed a device the size of a Tic Tac box with instructions on how to plug it into the electronics under the steering column. The gadget tracks only two things: speed, and the day and time a car is being driven.

Customers know upfront what behavior brings discounts. For instance, the less the car’s speed is above 75 mph — the top speed limit in Minnesota is 70 — the bigger the rate cut. The discount also is bigger if you don’t drive at the most dangerous times, such as right after the bars close on a Saturday night.

Every few months, each customer unplugs the device and uses a USB cord to hook it into a PC and download the information. As a hedge against fears about Big Brother, Progressive allows the customer to see the info and decide whether to send it in. If you’ve been driving like Batman during a chase scene, you’d get no discount anyway — so hit delete and just pay the standard amount.

About 4,800 Minnesotans are using TripSense. Their average discount is about 12%. Progressive is starting to roll out the test nationwide, hoping to get up to 15,000 participants.

“We’re still in research mode,” says Progressive executive Dave Huber. In focus groups, the company is finding out some interesting stuff. “Participants are more aware of their own driving,” Huber says. “They’re certainly more aware of their speed. To a person, they say that when they hit 75, the foot comes off the accelerator.”

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