LAST week, under my car’s dashboard, I installed a small wireless gadget that would monitor my driving. I wanted to see how it felt to have my driving behavior captured, sent to an insurance company and analyzed. More drivers, seeking discounts on auto insurance, are voluntarily doing just that.Insurers are offering these discounts as they aim to abandon the crude proxies they have long used to guess the likelihood that a particular policyholder will have an accident. These have included age, sex, marital status, miles driven (as reported by the driver) — and even credit scores, which can penalize those guilty of driving while poor.
Driving data is collected with a device that policyholders must be persuaded to install; it connects to the car’s computer system via a diagnostic port found in all cars since 1996. Such “user-based insurance,” the name for individualized pricing based on data collected from a vehicle, is spreading. Drivewise from Allstate is in 10 states; Drive Safe and Save, from State Farm, is in 16, with 11 more to be added next month; and Snapshot, from Progressive, is in 43.