# The Future of Insurance



## JasonF (Oct 26, 2018)

I've been subscribed to State Farm's "Drive Safe & Save" discount for a few years now, and I was told when I signed up that the only requirement was to report the car's odometer reading every once in a while. Just recently, the requirements changed, and now they un-enroll you and take away your discount if you don't keep the app running all the time to pair with the in-car reader device and provide data.

The reason why I ditched the app in the first place is because it used to auto-email me about every 1 mph speed limit exceedance or faster-than-hypermile acceleration from a stop, not as an encouraging "try to do better" email, but threatening me with losing the Drive Safe and Save discount if it keeps happening.

So now that the data collection is mandatory, what I worry about is arbitrary punishment for breaking unspecified rules.

Is there now leeway for speed, or does it ding you for every time you go 5 mph over, each and every time you move the car? How many times going 43 mph in a 40 mph zone does it count before they drop you into a higher risk category for a tiny infraction, and you're surprised by a huge rate increase or cancellation?

Since the device also has GPS, what areas of the city, or parking lots, should I not go near to avoid a rate increase or cancellation? Would State Farm increase my rate drastically if I visit one of the area theme parks, or see a movie, and cars occasionally get stolen from there or broken into?

Would they take away my low mileage discount (because I work from home) suddenly if I decide to go on vacation to one of the coasts here in Florida for a couple of days, because their system considers it a drastic increase in mileage?

These are all worthwhile questions when a feature they used to sell as getting a discount just for _attempting_ to to show them you're a safe driver turns mandatory and comes with not savings, but any excuse to increase your rate. It's something to think about, especially since once one company does it, they all eventually will.


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## garsh (Apr 4, 2016)

Back when I had Liberty Mutual, I took part in their program. It required putting a device in each car, and running an app on your phone while driving. Even then, when my quickest vehicle was my Nissan Leaf, it was all too easy to get dinged for excessive acceleration or braking. Luckily, I only had to do that for 90 days.

There's no way I'm going to put up with one of those nannies while I'm driving a Tesla.


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## FRC (Aug 4, 2018)

When State Farm first started their program many years ago, my agent referred me to some unknown to me third party to request the monitoring device. The third party demanded credit card info before they would send the device. Seems a bit silly these days, but back then giving my credit card info to someone unknown for something for which there was no charge was unacceptable to me. So I never got the device or enrolled in the discount program.

My recent experience with Tesla's safety score convinces me that I no longer have any wish to be monitored in such a way and I suspect your concerns are valid @JasonF. I can foresee a day when some insurers will require such devices and use them in ways we find untenable. But, in a free market, there will be insurers who use any such requirements by others as a selling feature to their coverage; i.e., "We don't require any monitoring device for coverage".


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## JasonF (Oct 26, 2018)

garsh said:


> There's no way I'm going to put up with one of those nannies while I'm driving a Tesla.


I have bad news, they're likely all going to require it very soon. In the interim, they might offer ridiculous high rates until you agree to it. It's no coincidence that yesterday Ford announced their software will integrate directly with a few insurance company's monitoring.


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## Ed Woodrick (May 26, 2018)

Not why it seems like folks are upset. If you want cheaper insurance, you just have to prove that you are cheaper to insure.


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## JasonF (Oct 26, 2018)

Ed Woodrick said:


> Not why it seems like folks are upset. If you want cheaper insurance, you just have to prove that you are cheaper to insure.


As I said above, I don't mind if you have to "earn your discount". What I mind is if it becomes a gamble, and you could end up with a much higher rate than if you hadn't tried to get the discount in the first place, because you run afoul of some arbitrary and unspecified criteria from the insurance company.

It's easy to say "What's the problem? Just drive below the speed limit everywhere and learn to hypermile and feather the accelerator, and earn your discount." But as I mentioned above, what if that's not the only criteria? What if it's not only _how_ you drive, but also _where_ you drive, or how far? It's well known that you get a different rate based on where your car is parked at night, there's nothing stopping them from applying that to where you drive as well. If you drive downtown once a month to have dinner, it could cost a lot of money in insurance.

I'm making up those rules, they aren't accurate. My point though is the rules the insurance companies apply to the monitoring are unwritten and arbitrary, and you could be punished for them. It's not like traffic laws where speeding or running a stop sign are well known and well documented rules, and you can expect to be fined if you break them.


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## Ed Woodrick (May 26, 2018)

JasonF said:


> As I said above, I don't mind if you have to "earn your discount". What I mind is if it becomes a gamble, and you could end up with a much higher rate than if you hadn't tried to get the discount in the first place, because you run afoul of some arbitrary and unspecified criteria from the insurance company.
> 
> It's easy to say "What's the problem? Just drive below the speed limit everywhere and learn to hypermile and feather the accelerator, and earn your discount." But as I mentioned above, what if that's not the only criteria? What if it's not only _how_ you drive, but also _where_ you drive, or how far? It's well known that you get a different rate based on where your car is parked at night, there's nothing stopping them from applying that to where you drive as well. If you drive downtown once a month to have dinner, it could cost a lot of money in insurance.
> 
> I'm making up those rules, they aren't accurate. My point though is the rules the insurance companies apply to the monitoring are unwritten and arbitrary, and you could be punished for them. It's not like traffic laws where speeding or running a stop sign are well known and well documented rules, and you can expect to be fined if you break them.


I hate to say it, but duh!

If they find that you aren't safe, then why wouldn't they be able to charge you more?

How you drive, where you drive, and how far you drive have historically been determining factors on auto rates.

The more accidents you have, the higher your rate.
Different cities have different rates.
The more miles you drive, the higher the probability that you have an accident.

These are all standard questions for policies.
Their rates have been unwritten and arbitrary for years.

Don't agree with them? Check with your state Insurance Commissioner.


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## Madmolecule (Oct 8, 2018)

The faster you drive, the less time you are on the road, minimizing the opportunity for and accident.

the massive insurance company buildings were not funded, by not knowing how to access risk
The good hands folks


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## Bigriver (Jan 26, 2018)

I doubt that everything in the State Farm Drive Safe program and algorithm is explicitly documented, but it is not all hidden and arbitrary.

There is the End User License Agreement. Clearly stated: you must use the beacon. That is fundamental to what the program is.










Don't like emails? Turn off notifications. It is in the preferences in the app.










Will they penalize you if driving on a vacation? Yes and no. They don't care that you are on a vacation, but they do care about overall miles. I went on a > 5000 mile road trip in October (on top of normal usage), and when my renewal came around in November, the discount for that car was down to $4. The discount is always looking backwards at the car's use the previous 6 months.

The threshold for speeding is 8 mph over the speed limit. You can see a detailed map and detailed info on the speed limit and your speed. The purple stretch is where I was "speeding" although I was the slowest car on the road.









State Farm didn't like that overall drive because of speeding and hard braking. I'm kind of surprised that it didn't have pings for hard acceleration, because I normally get an abundance of those.








But I feel no stress over the program. I really don't have a problem with my insurance company seeing details of how I drive. I am not striving to get a high score in their system. I am just taking advantage of the discount. I was told there would always be some discount just for participating, that they would never charge a higher rate than if I didn't participate. I believe that is true.


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## JasonF (Oct 26, 2018)

Ed Woodrick said:


> If they find that you aren't safe, then why wouldn't they be able to charge you more?


As I said though, sure, I don't mind that, if there is a net positive to it (lower rates for safer drivers). I would be perfectly happy with it if they could tell me that it's a tool to _reduce _my insurance costs by proving I'm a safer driver than average. But from what they told me this week, it's more of a gamble. I'm hoping they aren't using it as the opposite - that there isn't much chance of it saving me anything, and instead it's now a tool for them to hand out increases or cancellations on the smallest excuse.

Also like I said, it's possible I'm in the wrong here and I'm speaking to an audience (this forum) that already drives under the speed limit everywhere to avoid insurance consequences, and you see me as someone who is either looking for a loophole or refusing to accept the inevitable.



Bigriver said:


> The threshold for speeding is 8 mph over the speed limit. You can see a detailed map and detailed info on the speed limit and your speed. The purple stretch is where I was "speeding" although I was the slowest car on the road.
> 
> State Farm didn't like that overall drive because of speeding and hard braking. I'm kind of surprised that it didn't have pings for hard acceleration, because I normally get an abundance of those.


If that's true now (I haven't been actually using the beacon/data tracking for a while) they have definitely adjusted the program a LOT. It used to come with threatening emails if you go 1 mph over the limit! If it's 8 mph now, I'll probably hardly ever trigger it. And in 2018 every single acceleration in the Tesla came with a warning and a threatening email about that as well.

How long have you been using the app? Have you gotten email warnings? And has it helped your rate aside from the standard discount, or hurt it in the long run?


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## M3OC Rules (Nov 18, 2016)

It seems like they are still mostly in the data collection phase. They need the data to understand how personalized they can get, how accurate the data predicts, and how it compares to current methods. The data has value and they need to incentivize people to give it to them. 

On a Tesla earnings call they were saying how well their driving monitor predicted accidents meanwhile we were all saying how garbage it was. 🤷‍♂️


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## JasonF (Oct 26, 2018)

M3OC Rules said:


> On a Tesla earnings call they were saying how well their driving monitor predicted accidents meanwhile we were all saying how garbage it was. 🤷‍♂️


That's a good point to bring up, because I can expand on where I'm ok with it and where I'm not quite sure. I'm ok if they use _a combination of _those factors correctly to predict if someone is a risk of an accident. I become more wary of it if they don't _combine_ the factors, and instead they decide that any single one of them is a sign of a high-risk driver.

Like if you drive close to the speed limit, use Autopilot, don't brake hard or speed up quickly, but you're lumped in with high-risk drivers just because you have a habit of changing lanes without signaling occasionally, and lane assist is triggered by it, and that's one of the factors they're tracking toward high-risk drivers.


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## Bigriver (Jan 26, 2018)

JasonF said:


> I'm speaking to an audience (this forum) that already drives under the speed limit everywhere to avoid insurance consequences


I don't think anyone drives under the speed limit everywhere. And the one in a million who does is not necessarily being safe. But I do understand that there are those who do drive way too fast, and statistically they have more accidents and more severe accidents. I also believe State Farm has oodles of driving data, and where the app is flagging me as over the speed limit, they also know that I am not going fast relative to the others on that road.

One of the reasons that I'm somewhat sanguine about my State Farm driving score is that it does not necessarily translate directly to the rates. There used to be more help info in the app, which I'm not finding now, but here are 2 details I remember:

While it pings the score for speed, the only speeding that impacts insurance cost is going over 80 mph. It even specifically said that it doesn't matter if the speed limit is 80 mph or higher, that that high speed will impact your cost.
It pings the score for phone use, but it used to say that has no impact on your insurance cost, acknowledging that there is no way for them to know whether the driver is the one on that phone.
In short, I think they use the score to try to instill good behaviors, but not all aspects translate to affecting your insurance rate.



JasonF said:


> How long have you been using the app? Have you gotten email warnings? And has it helped your rate aside from the standard discount, or hurt it in the long run?


I don't remember exactly when I joined, but it was roughly 5 years ago. Have never received an email complaining or commenting on any aspect of my driving. (Always opt out of notifications!) Have only ever gotten emails when I need to update the car mileage in the app.

The app clearly shows the discount being received, per car, for the current 6 month policy. I don't think this can go negative, meaning it can never be a penalty. I am the primary driver of both of the Tesla's, so driving behavior is the same, but mileage on the model 3 is much lower than the model X. I think that is the primary reason for the larger discount on the model 3. The current $4 discount on the model X is the smallest it has ever been, but it's discount is always lower than the others because that car gets driven the most.


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## Klaus-rf (Mar 6, 2019)

I hope their speed limit mapping is more accurate that Tesla's. I'm sure their dongle and app can't read speed limit signs.


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## JasonF (Oct 26, 2018)

Klaus-rf said:


> I hope their speed limit mapping is more accurate that Tesla's. I'm sure their dongle and app can't read speed limit signs.


Their device uses GPS.


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## Bigriver (Jan 26, 2018)

Klaus-rf said:


> I hope their speed limit mapping is more accurate that Tesla's. I'm sure their dongle and app can't read speed limit signs.


But to State Farm's credit, they give a toll free number to report if their speed limit data is wrong.


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