
The big data of bad driving, and how insurers plan to track every turn - mgav
https://www.washingtonpost.com/news/the-switch/wp/2016/01/04/the-big-data-of-bad-driving-and-how-insurers-plan-to-track-your-every-turn/
======
whack
Discriminating against insurance customers on the basis of things they cannot
control, like their age or gender, is not good.

Discriminating against customers on the basis of driving habits that they have
control over, like how fast they drive, or how hard they swerve, is completely
fine.

If driver A drives safely at the speed limit, and driver B constantly pulls
stunts at speeds well over the speed limit, B is much more likely to get into
an accident than A. Why should A have his premiums raised just to subsidize
B's voluntary driving habits?

By making B pay for the costs of his unsafe driving habits, and rewarding A
for his safe driving habits, this feels like a great marketplace improvement.

~~~
pc86
You can absolutely discriminate based on age and gender for insurance
purposes, though. Men are charged higher rates than women. Teenagers are
charged higher rates than those in their 20's or 30's. A newly licensed 16
year old male will cost more than a newly licensed 26 year old male. My
insurance went down when I got married (which is not outside of my control,
but is still a protected class).

If there is valid statistical evidence that a certain group of people (male
teenagers with divorced parents, single women in their 40's earning more than
$60k a year, divorced white men in Massachusetts, whatever) is likely to
behave in riskier behavior for whatever reason, you can bet an insurance
company somewhere has the data and is charging accordingly.

~~~
criddell
> If there is valid statistical evidence

Is that true? Can they charge me a different rate because of my race or
religion?

~~~
zygomega
It's a grey area legally, and is usually prevented by ethics committees and
industry bodies. Practically, if you collect the information you run the risk
of a large anti-discrimination suit down the track. The usual proxy for
race/religion is first name, last name and zip-code - name clustering gives
very strong risk differentiation (I crunch numbers for insurance companies).

------
reallydontask
One can easily see how this will end up being near universal as people will be
charged a massive premium if they choose not to use tracking.

It will be sold/marketed as a discount if you use it, of course, but it's the
same.

It remains to be seen whether it will have any actual effect on the way people
drive.

Alternatively, self-driving cars take over before we're are effectively forced
to use tracking

~~~
randlet
I had this exact same discussion with my insurance agent yesterday. I opted
out but the agent had trouble understanding (or more likely I had trouble
communicating the idea) that once everyone else takes the discount that I will
no longer be paying "the normal price" but instead I will be paying a defacto
penalty because I don't want to be tracked. "No, it will only ever be a
discount!"

~~~
rconti
In California, your auto insurance "base rate" cannot go up by more than a
fixed amount (I think 40%?) upon renewal.

This explains why they give me both "Good Driver" and "Exemplary Driver"
discounts. I shudder to think what it would look like to lose both discounts
_and_ have the base rate go up by 40% all in one fell swoop.

~~~
iolothebard
I'm moved back to Oklahoma. The only thing that went up was my car insurance.
I thought it was nonsense, but 3 hail storms, crushed car (tree limbs),
tornado and 2 hit and run drivers (likely uninsured). I can see why. I pay
about 200 more a year. My insurance company has paid 36k to fix my cars the
last two years.

My only surprise is that they haven't dropped me. Oh yeah, they paid to fix my
rental car when it got crushed by a tree limb while my car was getting fixed
from a hit and run.

~~~
criddell
> 3 hail storms, crushed car (tree limbs), tornado and 2 hit and run drivers
> (likely uninsured)

Why should any of those claims make your rate go up? If a tree crushes your
car you aren't a bigger risk to insure next year.

~~~
sondring
Sounds like he's not parking in a garage. I could see that leading to higher
rates in some ares of the US.

~~~
binarycrusader
Geico, as an example, no longer cares if you park your car in a garage
(secured) or not. I was explicitly told they no longer consider it
statistically meaningful.

Instead, they go off statistics from the area code that your vehicle will
generally be parked in and how far your commute to work is.

------
aeharding
The problem I find with this is that it doesn't track everything that defines
safe driving, and could incorrectly identify what is safe.

For example, is driving more aggressively more dangerous than texting (or
simply not being attentive to the road)? Because only the former is tracked.

~~~
randlet
It is trivially easy to game too in some cases. My insurer wants to use your
smart phone to do the tracking over a period of 6 months after which you no
longer have to be tracked. Want to do some street racing every weekend? Just
leave your phone at home and go wild. Drive gently on your commute every day
until the 6 month period is up and then resume driving like a maniac.

~~~
bdavisx
And when they check your cars mileage and it has a boatload more than your
phone recorded? After you signed something that agrees you'll always (or
almost always) have your phone with you?

~~~
sandworm101
If they are tracking via phone, it sounds like they are more interested in the
person than the vehicle. So the extra miles could be assumed to be done by
other drivers.

If they track the phone, how can they tell if you are driving or just a
passenger?

~~~
sliverstorm
I'm not familiar with the exact device, but strongly suspect the cell phone
simply serves as the internet link. Early car trackers had integrated cellular
radios, but that can't be cheap.

~~~
gambiting
>> Early car trackers had integrated cellular radios, but that can't be cheap

My TomTom 5000 SatNav, which I bought for like $200 has a permanent connection
to the internet in all countries of the world with no monthly fee. It has an
integrated SIM card and TomTom just paid some fee so that it can connect to
the internet and get traffic updates wherever I am in the world. An even
cheaper Kindle 3G also had that. So I guess it must be relatively cheap.

~~~
sliverstorm
Obviously not earth-shatteringly expensive, no, but the tracker devices are
issued for free, not $200.

~~~
gambiting
Well, my ISP provided me with a very fancy fibreoptic router and a TV box with
a terabyte hardrive which I am pretty sure cost them pretty penny yet I
haven't paid anything for either of those things. They make money off me every
month though, just like an insurance company would - they give you a fancy box
for "free" and make money off you selling you their service.

------
gmisra
(Source; I have been working on the next generation of auto insurance risk
models for the United States)

Car (really, driving) insurance is heavily regulated by the government, each
state has agency over what information insurers are allowed to include in
their risk models, as well as actually auditing the risk models themselves.
Insurance nomenclature will refer to these inputs as risk factors. You can get
an overview of the rules in California from the Insurance Commissioner's
office here [1], and you should be able to find similar overview for your
state by googling "auto insurance risk factors <state>"

Usage-based insurance (UBI) is the most recent innovation to be approved for
widespread use. It's actually been around for a few years (at least 2012),
this article's relevance is mostly about the incorporation of UBI data-
gathering sensors directly into new vehicles. The key risk factors UBI focuses
on are miles driven, and extreme acceleration/deceleration events. These
factors were chosen because they can be easily measured using existing data
ports on older vehicles [2], amongst other reasons. The San Francisco-based
start-up Metromile [3] is one of the industry leaders.

Ultimately, UBI is limited in that it focuses exclusively on factors specific
to the vehicle. As many commenters have identified, "risky" driving behavior
is a both a function of how you drive, and how the people around you are
driving. The latter effect is much, much harder to capture, but the US
Department of Transportation is already engaged in R&D to identify potential
risk factors that could be used within the existing regulatory framework.

With the rise in "semi-professional" drivers via on demand ride-sharing
services, changes in ownership models via car sharing services, and the rise
of semi-autonomous and eventually autonomous vehicles, the mechanics of
automotive insurance are going to change _a lot_ in the next few years.

Happy to answer questions as best I can if people are curious.

[1] [http://www.insurance.ca.gov/0400-news/0200-studies-
reports/0...](http://www.insurance.ca.gov/0400-news/0200-studies-
reports/0600-research-studies/auto-policy-studies/executive-summary.cfm)

[2] [https://en.wikipedia.org/wiki/On-
board_diagnostics](https://en.wikipedia.org/wiki/On-board_diagnostics)

[3] [https://www.metromile.com/](https://www.metromile.com/)

------
parennoob
Sounds like a big NO from the privacy perspective. I hope this gets regulated
to the point where these companies cannot offer a discount based on such
intrusive tracking.

If you enable a random insurance company to have all data about where exactly
you have been _every moment of the day_ , you are giving up a lot of your
privacy. And I bet the terms of service will be the standard "Oh, by the way,
we are going to share this with all our partners" kind.

~~~
dmm
Everyone I know carries a cellphone. They track you everywhere you go, even
when the gps is off. Ever wonder how Google provides its live traffic info?
New cars have gps and cell radios. If they don't already report vehicle
position I'm sure they will in a few years. It's probably already used by the
three letter agencies. License plate scanning cameras are a commodity now.

Google, AT&T, Ford, and the NSA already know where you are at all times.
What's one more?

Sure you could leave the cell phone at home and drive a 20 y/o car but that
will become increasingly difficult and conspicuous. "Why are you driving that?
Do you have something to hide?"

I don't see this trend as stoppable. I think the best we can do is to
implement strong laws about how this information is stored and used. And
honestly tracking where everyone drives can do a lot of good. It could allow
for much more efficient and fair transportation taxes and eliminiate hit-and-
runs for example.

~~~
zAy0LfpBZLC8mAC
> I think the best we can do is to implement strong laws about how this
> information is stored and used.

Given that those who would be responsible for enforcing those laws have
already demonstrated that they don't mind breaking them themselves, I don't
think that that could possibly work out.

------
sandworm101
Why the assumption that this data tracking is somehow not an issue for
driverless vehicles? Autodrives will still need insurance. They will still be
tracked, by google/apple and any number of other "business partners" for a
start. Those issuing insurance will still want to keep tabs on vehicle
location/speed/movement should the inevitable insurable event occur. The
privacy concerns will be the same regardless of who is behind the wheel.

Now the exception to above is perhaps a world where none of these autodrives
are privately owned. One might think that in such situations a passenger's
movements would be anonymous. They won't be. Even cabs/ubers today keep track
of who goes where. Whenever a means of transport is not privately owned,
payment will be an issue. And payment leads to individualized tracking.

The further exception to above would be autodrives owned by google and paid
for with untraceable cryptocurrency (or cash) ... that's one too many layers
of fantasy to debate.

~~~
maxerickson
If you were able to pay with coins, they would just be able to tell that the
goofball who always only pays with coins used the vehicle.

~~~
sandworm101
Lol. As if any trip will cost so little that coins are the problem. If the
google cars take cash they would become unguarded ATMs full of unmarked 20s
... on wheels... driving alone through bad neighbourhoods.

~~~
Wingman4l7
...that could phone in a distress call to a private security firm if it was
attacked.

------
mschuster91
IMHO the biggest problem on roads is not speeding, it's drunk/drugged driving
(most often caused by a lack of adequate public transit at nighttime and cabs
being more expensive than the drinks of the night)... and morons who didn't
drive for 10 years, are afraid of driving, don't seek help and then fuck up
big time when they have to drive (like a distant relative, who hadn't driven
for a decade and then had to drive her husband to the doctor. Nearly caused
three accidents on the way due to panic).

With pilots we have minimum flight time per year as well as medical
requirements. I suggest similar but for cars because people physically unable
to drive or people just being morons driving 10 km/h under the speed limit are
a risk to everyone else, not just them.

The problem is that the trend to data-driven insurances and other bullshit
like this won't help for these cases because computers and especially deep
learning models are inherently fallible. A skilled mathematician may look at a
risk calculation and check if the premium is adequate (and in case of old
people needing their cars to not lose their entire freedom, also "close his
eyes")... no way to do so with a neural network. Not to mention that all that
data IS going to be abused. If you want to check for public acceptance of
government snooping, look at the fan reactions for NCIS episodes. No one ever
objects to the portrait that surveillance and hacking is neccessary for law
enforcement...

------
oneJob
trackers on our phone. trackers in our cars. trackers in our web browsers. and
all non-government, non-big brother. this is the definition of soft power and
the panopticon, and yet, this comment will likely only annoy most folks...

~~~
jodrellblank
trackers on your landline phone calls, CCTV face recognition in public places,
trackers on your employer's door card system, roadside license plate
recognition, tracked usage of payment cards, tracked usage of loyalty cards...

the universe always knows where you are, it's only other people who don't. And
soon, they will.

------
alyandon
Yeah, I won't be signing up for something like this precisely because this is
nothing more than a gimmick that insurance companies will use to maximize
their profits.

How does the insurance company know you are hard braking because you are an an
inattentive jackass that is texting while driving that suddenly has to brake
to avoid a collision vs a safe driver that had to suddenly account for someone
in front of them making an improper lane change?

The short answer is they can't but you can bet that they'll use that data to
justify raising your rates.

~~~
munin
in some ways it probably doesn't matter - if you are an otherwise safe driver
that lives in a county full of side-swiping jerks then your rates will go up
because you're a higher risk to the insurance company than a safe driver that
lives in a county full of other safe drivers. they already do this by
considering where you live and work when calculating your rate.

you _are_ a higher risk, because you live around a bunch of jerks. is it your
_fault_? not really, but the insurer isn't there to assign _fault_ , they
mitigate risk.

~~~
alyandon
True, I already pay a higher premium due to living in a large city. However,
my point is I believe insurance companies will intentional use the data they
gather about one's moment to moment driving habits in order to justify premium
increases they otherwise couldn't - even for safe drivers.

------
pierre
If you have interest in this suggest AXA have distribute a data set of ~2600
drivers telematics records for a kaggle competition :

[https://www.kaggle.com/c/axa-driver-telematics-
analysis](https://www.kaggle.com/c/axa-driver-telematics-analysis)

------
rconti
I'd be interested in hearing more from insurance companies on how they
calculate "safe" driving. Are they applying a simple model where speed,
acceleration, and braking are the only inputs considered? Or are they actively
gathering data on many different inputs and correlating them with accident
data?

Also, of course, the insurance companies have different incentives than I do
as a driver, or, indeed, society as a whole. The the stereotypical
clueless/passive/elderly/(dare I say Prius) driver who accelerates incredibly
slowly, brakes incredibly slowly, vaguely lists from lane to lane (without
signaling) is a terrible driver, and is arguably dangerous to everyone around
them. However, they might move _so_ slowly that other drivers are able to
anticipate and avoid them, so the accident claims data might not show them as
high risk. (although they might tend to make lots of parking lot claims as
they 'feel' their way into a parking spot). As a society we don't want to
encourage clueless driving; on the other hand (if they can avoid parking lot
scrapes), the insurance company might well prefer this driver.

The insurance claims-based model absolutely incentivizes attentiveness, as you
can avoid both your _own_ accidents, as those that others attempt to cause.
It's certainly not perfect (particularly when paired with things like credit
checks), but I'd hate to see drone-like driving preferred over attentive
driving.

Another thing to note is that folks with an active interest in driving
(engaged, sometimes drive fast, have advanced training, etc) will absolutely
avoid these technologies because they're all convinced they'll be punished in
the model -- so even if the insurance companies are actively collecting data
in an attempt to refine their models, it will have a selection bias.

The main thing these data will be lacking is context. Did I brake hard because
I was texting and almost hit the car in front of me? Or did I brake hard
because I goddamned felt like it? Were there cars behind me at the time, or
was I driving in such a manner that there was no risk of collision? Can it
separate inputs that are likely to cause two vehicles to collide, versus
inputs that might cause a single-vehicle collision (in which case context
doesn't matter)?

Hell, just last week I unexpectedly threw my brand-new car into a full ABS
panic stop to avoid some deer. Then again, I guess the insurance company
doesn't care why. It's better than a collision, but they'd prefer that I never
drive anywhere I might ever get in an accident. Actually, they'd just prefer I
don't drive anywhere at all.

~~~
foobarian
It would be so fascinating to have access to a large set of this kind of data.
What speed correlates with the lowest accident rate? And in which locales?
Would probably see surprising numbers, either far above or below speed limits
corresponding to empty roads or bumper-to-bumper traffic.

------
djaychela
I've just spent a week here in the UK driving with an insurance company's app
which tracks your driving. I got 9.3/10 after the mandatory 200 miles of
driving, and wild generally consider myself to be a safe driver on the road -
I've done a fair amount of rally driving, and ridden motorbikes for nearly 30
years so I'm reasonably aware of the risks and what can go wrong, plus I drive
a van as my daily driver.

What I was aware of during the tracking process was how little the app was
aware of - if was sensing acceleration and GPS position, but nothing else, and
given there were plenty of times that it wasn't aware of the on road situation
(such as someone pulling out in front of me, a road blockage, traffic, etc), I
was thinking that it really can't tell everything it needs to - or indeed if I
put my indicators on when I change lane, etc. Even if you had a system that
connected to this CAN bus to sense such things, the picture would be
incomplete.

However, I'm sure that it will be useful to a degree, but there will be plenty
of outliers in the data where there are safe drivers who are marked as unsafe
and vice versa.

------
sremani
This is one of the steps needed for autonomous cars. At this moment I support
it (am open to changing my views). If state laws and regulation are the
biggest obstacle against Autonomous cars. Insurance companies are the similar
force for them, insuring an autonomous car will be cheap, but if you want to
drive your car, the insurance premium is going to be high. In future, manual
cars, just like most sports cars today are the dominion of the rich.

~~~
s_q_b
I agree, until "Affluenza" type teens start causing fatal accidents with
manually operated cars, at which point the legislature will outlaw them
entirely.

~~~
gambiting
Right now "affluenza" type teens cause plenty of accidents in both shitty cars
and super sports cars, and no one is banning them from driving - as long as
they can afford ridiculous insurance premiums they bring on themselves. Don't
see that happening later either.

~~~
s_q_b
Self-driving cars will shift that equilibrium. We outlaw types of insurance
all the time.

------
EdSharkey
It must be very profitable to be in control of people and to regulate their
behavior.

If you can convince people to regulate their own behavior the way you want,
all the better. This total surveillance society we're building means more
people are looking over their shoulders and not wanting to "get caught" doing
something someone else doesn't like. It's pure profits for the plutocrats.

------
rwmurrayVT
For over a year now I thought "SnapShot" from Progressive was just some absurd
marketing gimmick. I didn't realize it was a legitimate product.

Based on the way I see people drive in Hampton Roads, VA I don't think any one
would ever use this. There are maniacs at every turn. If you are willing to
risk going the speed limit on I-64/262/464 you're likely to get run over.

------
FLUX-YOU
I'm betting this is going to make people drive worse. Or exacerbate the
existing bad drivers into driving worse while the already-good drivers just
get the benefits. Sort of like the idea behind red light cameras.

But I'm sure law enforcement will appreciate another massive database.

------
tempVariable
Insurance is business. According to province, state etc. law, clients must pay
to said business to 'eventually' be able to use it to cover partial costs,
deductibles aside. Business is not mandated by law to any standard which says
client must get a good deal.

Business is allowed to use any input variable in the whole scheme to jack up
prices. Business is not mandated to lower them for any reason.

Well, lets give them more input on how to jack up more prices.

This conversation has been had in Ontario, Canada for so long where the
insurance rates are the highest in all of Canada. It is not unheard of to pay
5000 to 7000 in Brampton, Ontario. If you move over just to the west, your
rates will drop by 2000.

Laws need to change, as usual.

------
roymurdock
One way to get around this if you're not crazy about the idea would be to put
together a peer-to-peer insurance pool. (Discussed on HN here:
[https://news.ycombinator.com/item?id=10311357](https://news.ycombinator.com/item?id=10311357))

The problem would be finding the right size and composition of people that you
can somewhat trust to be reliable drivers and that use their car around the
same amount as you so that the risk profiles are all roughly the same.

------
logicallee
I don't know anything special about this subject, someone correct me if I'm
wrong.

so I thought the actual role of insurance is to cover the case where the
difference from the arithmetic average cost (i.e. average of all cases,
consisting overwhelmingly of neutral cases, but with some rare negative
possibilities) and the negative event is so large that the rare negative event
would be life-changing but the average case is trivial.

for example, it might make total sense for a tiny startup to take out a policy
against a total, multi-day AWS outage. This is because that event is basically
impossible to occur, but if it did it might bankrupt them immediately. (You
can use your imagination as to why this might be.)

So the basic role of insurance is to reduce the variation - get things closer
to the arithmetic average case.

But does this work if people _don 't know_ the average case?

It is easy to find nationwide accident rates, one could make an educated guess
about it. But if insurance companies are tracking your every turn and coming
up with a unique offer - what is to say it is remotely fair?

How can anyone tell if their insurance comapny, "You, personally, have driving
habits that give you a 10% chance of having an accident this year, and it's
remarkable that you haven't had any in the past 8 years you've been driving.
You've simply been lucky."

If they're a big-data insurance company, who are you to argue? After all, your
friends have been in accidents, you know it's risky.

What I'm getting at is there is huge information-asymmetry if the insurance
company has access to a lot more information than the person buying the
insurance does!

What's to keep them from selling you tsunami-insurance at Japanese or
Californian rates, even though you live in Minnesota?

In the status quo, it's because you KNOW that you live in Minnesota. But if
your every choice is being tracked, doesn't that assumption go out the window?

Of course, some kind of a legal requirement to share their actuarial
calculations with you would never work, because there is not a company in the
world that wouldn't figure out how to lie - you can't get companies to share
their profit margins or to keep to a certain profit margin, it's just
literally impossible. (It would be like getting your SO not to think of anyone
else during sex, no matter how fleetingly. That is just not a possible goal,
and I use this analogy because companies' internal calculations are similar to
what is going on in someone's head.)

So if private companies can't be held to a profit margin, is the answer state-
issued insurance? This would be beneficial in many ways: for example, if
someone's behavior is so risky that their average case is pretty bad, then
perhaps the state can still choose to subsidize them from less risky
customers. A private company might choose to fire them as a customer (or offer
them an unaffordable rate.)

The difference is, when prices are close to unaffordable, can insurance
companies mislead customers into thinking that it is because they, personally,
really are that risky?

How do we stop this? I think the answer is to simply not allow this level of
personalization.

~~~
zAy0LfpBZLC8mAC
Well, the idea is that the market takes care of lies. If a different insurer
can correctly predict that a lower premium is sufficient to cover your risk,
they should try to sell their product to you at a lower price to gain you as a
customer and thus increase their revenue.

Now, that does _not_ mean that it would be fair. Insurance doesn't care about
fairness. They balance premiums with modeled risk, not with actual risk.

------
massysett
Cool. I see people driving like maniacs. Why should I have the same high
insurance premium that they do?

~~~
rconti
Because I drive more aggressively than you and I don't make claims or get in
collisions. Or make comprehensive claims. Why should I subsidize your claims?

