On-board Monitoring Device Helps Drivers Save on Insurance
Drivers will soon have a new incentive for obeying speed limits, avoiding excessive braking and using turn signals. While some of us might not like the idea of having our driving habits monitored by an onboard spying device, the prospect of paying less for car insurance might just change our attitudes. And whether we like them or not, computerized tracking systems that grade us on our driving style will soon be as commonplace as the now-ubiquitous cell phone.
Sprint’s Emerging Solutions Group has launched a system that allows auto insurance companies to assess pricing based on customer driving habits, rather than arbitrary information like where they live or their credit score. Called ‘Usage Based Insurance’, or UBI, it allows insurers to customize pricing to each driver, giving discounts to good drivers and charging more to those who speed or frequently slam on their brakes.
The device plugs into a car’s diagnostic system and analyzes gathered data with scoring software that rates driver safety. It then transmits the information via a wireless signal to the insurance firms. Sprint says it’s a win-win situation for both insurers and drivers – good drivers, that is. Insurance companies will increase their bottom line, reduce costs and better assess the risk that drivers pose. Good drivers will save on insurance.
Insurers can also offer additional programs for policyholders, such as using the device to monitor vehicle health, fuel efficiency, service needs and location.
Plans are in place to expand the monitoring program to include financial institutions. In this application, the device will be used to prevent drivers from starting their cars if they’re late on their payments. It will also be able to locate and lock vehicles that are being repossessed.
To bring more insurers onboard, Sprint is launching ‘Jump Start UBI’, which allows companies to try out the monitoring device on their customers at no charge for three months.
All in all, the trend toward vehicle monitoring devices indicates they’ll be commonplace in the near future, inspiring us all to clean up our driving habits to get that coveted insurance discount.