Motor Mouth: The cost of cheaper insurance is your privacy

Usage-based insurance could be the slippery slope that leads us all into an Orwellian driving future 

How cheaply do we surrender our freedoms?

The nightmare of Big Brother — at least how I’ve always understood it — has always been one that is forced upon its citizenry. To be sure, the methods are always insidious, the doublespeak always cloaked in soothing palliatives and the promise of a Utopian society, not to mention the occasional financial incentive. But, as much as the process of being constantly surveilled is stealthy and surreptitious, it is always forced upon us. We would not, in a million years, volunteer for an Orwellian future, right?

Oh, if only that were true.

It turns out that, in the last few years, some six million motorists — mostly in the United Kingdom and the United States — have volunteered to have a black box installed in their automobile that monitors their behaviour behind the wheel, with all of the data from every kilometre of their driving fed right back to their insurance companies.

The lure is that, should you drive according to the insurer’s guidelines, you could actually have your monthly insurance premium reduced. Each insurer differs as to what they actually measure and what specific limits they pose, but the premise is always the same: drive in a “normal” manner — i.e. as if you were a little old lady from Pasadena driving a Suzuki Sprint with one spark plug missing — and you will see savings.

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How significant are these savings? Well, it depends on whom you talk to. Desjardins’ new Ajusto black-boxed insurance program being offered in Ontario and Quebec promises as much as 25% savings if you respect their limits of not accelerating harder than 13 kilometres per hour per second or braking more than 15 km/h/sec. In Quebec — where the RCCAQ (Le Regroupement des cabinets de courtage d’assurances du Québec) is estimating that up to 30% of drivers may opt for such telematics-based insurance by 2017 — the median savings is said to be about 12%. For a little more perspective on that, remember that Quebec automobile insurance is partially subsidized, the average consumer paying about $650 annually for their supplementary property damage insurance. Do the math and the costs savings to the average Ajusto customer in Quebec is about seven bucks a month. Even for someone in Ontario currently paying $2,000 a year, that net savings would translate into but $20 a month, not enough to buy you a 12-pack unless The Beer Store is having a fire sale.

The Ajusto wireless device from Desjardins Insurance is installed into a vehicle’s diagnostic port and measures distance travelled annually, frequency of hard braking and acceleration, as well as time of day the vehicle is driven to determine savings on insurance rates.
Handout, The Canadian Press

A few other companies in Quebec offer greater savings. Industrial Alliance’s Mobiliz, for instance, targets drivers between the ages of 16 and 24, generally acknowledged as those most at risk for traffic accidents. According to the company, the average young adult saves about 25%. Of course, only the most law-abiding of teenagers signs up for the program, especially since Mobiliz is the only black box insurer that will actually raise your rates — by up to 100% if you’ve been particularly naughty — if you speed too dramatically or too often (for instance, every instance of “extreme speed” will result in a premium of $10 being added to your monthly bill). So that the insured can immediately see the result of their driving behaviour, Mobiliz’s premiums are adjusted monthly meaning their premiums could fluctuate dramatically.

Nonetheless, the lure of lower insurance rates is finding traction. According to Towers Watson, a consulting firm in the U.S., about 200,000 Americans a month are signing up to have said black boxes installed in their cars. The organization also says that “nearly 90% express openness to buy a UBI (usage based insurance) policy in the U.S. if there is no risk of premium increasing.” Canadian Business, on the other hand, reports that a Deloitte survey here in the Great White Frozen North revealed that 61% of Canadians would not be interested in such surveillance devices in their cars.

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In this 2006 file photo, Adam Gordon, of Saint Paul, Minnesota, displays the wireless device that his auto insurance provider uses to monitor his driving speed, distance, braking and accelerating, and what time he’s driving. In exchange, Gordon gets a 15% savings on his auto insurance premiums.
Archive photo, Craig Borck/St. Paul Pioneer Press/

That would seem to put us in a more independent mindset than our Yankee friends, usually the last bastion of personal freedoms and privacy. Nonetheless, I would still want to know why a seemingly incredible 39% of Canadians think volunteering for such a program is a good idea? Indeed, forget about the plight of the scofflaw motorist for a moment; why would anyone volunteer to supply evidence of malfeasance of any kind that might be used against them? This is akin to volunteering for a tax audit. Or videotaping your business hotel room for your spouse so that they might witness first-hand the nonsense you get up to when they’re not around. Surely, even those of you smugly sitting in your Toyota Priuses, comfortable in the knowledge that you’ll never speed, understand that opening up every part of your personal life to constant scrutiny — data loggers in your trousers and breathalyzers for everyone! — is never a good idea.

So far, the push for the installation of these black boxes have been rather modest campaigns by private insurance companies, all — at least in Ontario — assuring that the information won’t be used for nefarious purposes (i.e. raising your rates). Imagine, however, if the political class gets involved. The Wynne government is already desperately looking for ways to fulfill their promise to lower Ontario’s insurance rates. And, what if politicians in B.C., Manitoba and Saskatchewan — provinces where the entire insurance programs are government run — get behind this constant monitoring of motorists? How long do you think it will be before such schemes become mandatory and a cash cow for beleaguered governments?

All this for as little as seven bucks a month. If we do end up in some brackish Orwellian dystopia, we will have no one else to blame but ourselves.

Could our driving data fall into to the wrong hands?

So far, the discussions regarding the privacy of the information culled from owners’ black boxes has focused on who owns the data. To their credit, virtually everyone in the insurance industry seems to agree that the information must remain the property of the owner (Quebec’s RCCAQ has asked for guidelines to be established that all information collected remains the property of the insured and such policies are already in place in Ontario). That said, the big insurance companies aren’t the ones actually collecting the data; that generally rests with third party data collection firms. And, depending on which company is doing the information gathering, your particulars could be housed in Canada, the United States, or even Italy. With the porosity of data security now being top-of-the-fold headline material these days, do we really need more Heartbleed leaks to understand that data mining is the playground of the modern scoundrel?

Source:  http://driving.ca/auto-news/news/motor-mouth-bowing-down-to-big-brother-for-cheap-insurance By David Booth Originally published: April 25, 2014