How much privacy would you give up for a better auto insurance rate?

Here's a Progressive thought: Plug a data collection, tracking and wireless reporting device into your car's on-board diagnostic port (usually, under the steering wheel), and--maybe--get a better rate on your auto insurance. I say, "maybe" because poor driving habits could result in just the opposite. Progressive calls it "MyRate", and they're not the only insurance company interested in the pay-as-you-drive (PAYD) model.

For now, it's a voluntary program. (Good news for those of you born with a lead foot.) The MyRate device, says Progressive's web site, records the vehicle's speed and time of day, when the device is connected and disconnected from the vehicle, vehicle Identification Number (VIN) upon installation, miles driven and rates of acceleration and braking.

The site also makes it clear that "the MyRate device does not contain GPS technology and does not track vehicle location or whether you're exceeding the speed limit, nor do we know who is driving the car in which the device is installed." That's a relief!

Mind you, it is still a monitoring device transmitting data wirelessly to the mother-ship. It's sort of like driving with your agent in the passenger seat, only he's blindfolded.

You might also note that Progressive's Privacy Statement disclaims:

"MyRate data may be disclosed when we’re legally required to provide MyRate data, such as in response to a subpoena in a civil lawsuit or by police when investigating the cause of an accident..."

As for how long that data is kept:

"To meet our legal obligations to state departments of insurance, we keep information collected or derived from the MyRate device for the time we determine is required by law..."

According to Progressive's web site, MyRate is ideal for "safe and/or occasional drivers". Which, probably describes most of the people who already get Progressive's best rates. They're also the customers progressive probably doesn't really need to monitor--by virtue of their statistically lower likelihood of tickets and accidents.

Which begs the question, if only Progressive's safest drivers are encouraged to use the MyRate device, then why bother? What's in it for Progressive?

While MyRate offers a potential discount to good drivers, it's potential to mitigate claims is undeniable. Even good drivers make claims. This sort of data could be used to justify denying a claim made by a customer, or to aid in bolstering a claim made against someone else's customer.

Via: NBC's DFW News (http://www.nbcdfw.com/news/local/GPS-Tracker-May-Help-Lower-Your-Car-Insurance.html)

About Jeff M. Fischbach

Jeff Michael Fischbach is founder and President of SecondWave Information Systems (SecondWave.com), a consulting firm specializing in Forensic Technology. Since 1994, he has served as a board member and technology adviser to numerous professional organizations and corporations. Mr. Fischbach has been engaged as a litigation consultant and Forensic Examiner, offering expert advice and oversight on matters involving intellectual property, computers, information systems, satellite, tracking and wireless communications technologies. He has advised law enforcement, foreign government representatives, judges, lawyers and the press.