Friday, Sept. 7, 2012
Big Brother in Your Car
Your chipper TV friend Flo, otherwise known as Progressive Insurance's ubiquitous shill, wants you to be excited—very excited. As you've probably learned from her effervescent commercials, she and her Big Brothers in the insurance biz want you to see their new tracking devices for your car not as a privacy-destroying step to justify raising your government-mandated car insurance premiums. Instead, they want you to see the gizmos, which record your vehicle's every move, as a great innovation to get you premium discounts for safe driving.
Yet, despite the happy TV ads, questions are nonetheless swirling around this so-called "telematics-based insurance"—questions that Flo doesn't want you to ask, because the tracking system is so frighteningly invasive and arbitrary.
To appreciate that disturbing reality, consider how the system operates. Quoting a Progressive manager, FoxNews.com reports that the tracking technology "works on algorithms that use your driving style to predict how likely you are to have an accident and how expensive it will be if it happens." Among the myriad data points that could be collected are braking frequencies and commuting routes.
This may seem innocuous, but the potential use of such data makes the film Minority Report seem less like fantasy than spot-on prophecy. In that flick, humans have developed technology to fight "pre-crime"—that is, to stop crimes before they occur and punish people for allegedly preparing to commit said crimes.
"Telematics-based insurance" could easily become the insurance-industry realization of that technology. It could help insurers charge you higher rates for embracing driving styles and geographic routes that supposedly mean you are about to incur collision costs, even if you haven't actually incurred said costs—and even if you never will incur said costs in the future. Put another way, rather than charge you higher premiums after you incur costs, the companies can use this technology to preemptively punish you beforehand a la a Department of Pre-Crime.
What's wrong with such a system? The assumptions baked into the algorithms, that's what. Yes, actuarially speaking, your particular braking method may suggest you are more likely to crash at some point. But citing generalized odds to assume that you in particular will definitely crash in the future—and to then act on that assumption by charging you higher premiums in the present—would be both illogical and predatory, forcing you to pay for accidents that haven't occurred.
Of course, Flo insists the system today only exists to give customers premium discounts for "good" driving. However, if and when the devices become a prerequisite for insurance—which many experts predict will happen—we would likely see a system in which the standard premium is inflated and the discounts for "good" driving only slightly reduce premiums.
What can be done about this? Fox reports that some states "currently have specific mandates that prevent insurance companies from requiring" the tracking devices. That's a good step, but the regulation is easy for the industry to get around with punitive pricing schemes for those who do not put the devices in their vehicles.
No, the only real protection is for states to ban targeted premium hikes against drivers who haven't increased payout costs for their insurer.
Insurance executives will no doubt say that's an unacceptable government intervention into the "free market." But, then, so too is the government requirement that all drivers buy car insurance. And if states are going to force people to be the insurance industry's customers—a mandate that is a financial boon to insurers—then in exchange, it's fair to require those companies to adhere to some basic consumer-protection regulations.
Without such rules, Flo or another one of her Big Brothers will probably soon be in your car—whether you like it or not.
David Sirota is a best-selling author of the new book "Back to Our Future: How the 1980s Explain the World We Live In Now." He co-hosts "The Rundown" on AM630 KHOW in Colorado. E-mail him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.
Yet, despite the happy TV ads, questions are nonetheless swirling around this so-called "telematics-based insurance"—questions that Flo doesn't want you to ask, because the tracking system is so frighteningly invasive and arbitrary.
To appreciate that disturbing reality, consider how the system operates. Quoting a Progressive manager, FoxNews.com reports that the tracking technology "works on algorithms that use your driving style to predict how likely you are to have an accident and how expensive it will be if it happens." Among the myriad data points that could be collected are braking frequencies and commuting routes.
This may seem innocuous, but the potential use of such data makes the film Minority Report seem less like fantasy than spot-on prophecy. In that flick, humans have developed technology to fight "pre-crime"—that is, to stop crimes before they occur and punish people for allegedly preparing to commit said crimes.
"Telematics-based insurance" could easily become the insurance-industry realization of that technology. It could help insurers charge you higher rates for embracing driving styles and geographic routes that supposedly mean you are about to incur collision costs, even if you haven't actually incurred said costs—and even if you never will incur said costs in the future. Put another way, rather than charge you higher premiums after you incur costs, the companies can use this technology to preemptively punish you beforehand a la a Department of Pre-Crime.
What's wrong with such a system? The assumptions baked into the algorithms, that's what. Yes, actuarially speaking, your particular braking method may suggest you are more likely to crash at some point. But citing generalized odds to assume that you in particular will definitely crash in the future—and to then act on that assumption by charging you higher premiums in the present—would be both illogical and predatory, forcing you to pay for accidents that haven't occurred.
Of course, Flo insists the system today only exists to give customers premium discounts for "good" driving. However, if and when the devices become a prerequisite for insurance—which many experts predict will happen—we would likely see a system in which the standard premium is inflated and the discounts for "good" driving only slightly reduce premiums.
What can be done about this? Fox reports that some states "currently have specific mandates that prevent insurance companies from requiring" the tracking devices. That's a good step, but the regulation is easy for the industry to get around with punitive pricing schemes for those who do not put the devices in their vehicles.
No, the only real protection is for states to ban targeted premium hikes against drivers who haven't increased payout costs for their insurer.
Insurance executives will no doubt say that's an unacceptable government intervention into the "free market." But, then, so too is the government requirement that all drivers buy car insurance. And if states are going to force people to be the insurance industry's customers—a mandate that is a financial boon to insurers—then in exchange, it's fair to require those companies to adhere to some basic consumer-protection regulations.
Without such rules, Flo or another one of her Big Brothers will probably soon be in your car—whether you like it or not.
David Sirota is a best-selling author of the new book "Back to Our Future: How the 1980s Explain the World We Live In Now." He co-hosts "The Rundown" on AM630 KHOW in Colorado. E-mail him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.
© 2012 CREATORS.COM
I remember finding out how American Family, yes, the same place caught red-lining in Milwaukee, this place set my rates based on my zip code, even in all-white Janesville. When I moved from one side of town to the other, my rates changed because of the zip code as my agent said. Later, when I moved to Milwaukee area, I wisely asked my agent about the different rates in different zip-codes, and chose to live where the rates were low
One problem with using zip-code, that only covered where I park my car when I am at home, it does not cover where I drive that car, like where I work, or where I could be shacking with some black tail on the 'hood. This is where Progressive is going with their "snapshot" thing. Not like a camera taking pictures of you brushing test or putting on make-up while driving (we all have seen this), but it sounds like GPS and accelerometers detecting start-stop (city) driving. Can it tell how hard I brake? Can it tell that I am braking frequently because of a long line at a stoplight, not some idiot pulling out in front of me?
The comment about being used only to "give customers premium discounts for 'good' driving", then it means assume the worst, then give back a reward for hard proof of being the good exception. That's what David means by "punitive pricing schemes for those who do not put the devices in their vehicles". Is there also a clock in there, so they can see I only drive it to church on Sundays, and can catch that used car salesman in a lie?
The purpose of "insurance". which is just a privatized "redistribution" technique, is to spread the cost of a handful of exceptions out over a large base, because it could happen to anybody. People accept this, it's called paying for "peace of mind", relieving us from the burden of fearing financial disaster in the event that "crap happens".
When the insurance companies can segregate, they are doing the good Republican thing of making sure one demographics money cannot drift over to an undesirable demographic. Let it continue on "snapshot", and the next thing is genetic maps on health and life insurance. Got the gene for cancer? Then your rates go up! Let all these things happen, and then we can "approve" the following:
- tax blacks to pay for black programs
- tax democrats to pay for democrat programs
- tax muslims to pay for muslim programs
- tax women to pay for programs that benefit women
and then we can combine features...
- tax poor black adult males in the 'hood to pay for programs
for poor black adult males in the 'hood.
- charge higher rates for white, shaved, tattooed males with loud pickup trucks who don't wear helmets on there Harley while attending Blues festivals.
Are you going to stand for this when they come after your little group of one?
And the NWO, whether spring from Rep or Dem, will use all this tech to keep political dissent in check. The "algorithm" used will make cost of living so miserable for an "enemy of the state", that they will have no choice but to give up the fight that they can not afford. No dissent and it si clear and obvious that you have a "perfect" government.
Tell me again why when I take my car in for dealer service, that they say "You will get a survey, you must give us perfect marks or they punish us. If we were not perfect, talk to us before the survey."
It is not only "government" that wants no dissent. Private Business also seeks no dissent.