Auto insurance companies have long been willing to cut drivers a deal with better rates if they manage to avoid the unwelcome sight of flashing police lights in the rear-view mirror. Now, an academic study may one day provide insurers with the technology to increase their rates for people with unsavory habits behind the wheel.
The Georgia Institute of Technology is sponsoring a study using global positioning systems to track the movements of cars and monitor the motoring habits of their drivers. The most immediate result could be a better understanding of Atlanta's traffic patterns, a city known for its increasing sprawl and congestion.
The long-term goal is to evaluate GPS technology as a method of computing mileage-based auto insurance rates. Proponents say the technology is an egalitarian and efficient way to determine insurance rates, but civil libertarians counter that the tracking scheme is an invasion of privacy.
"We are looking at how drivers interact with their vehicles," said Randall Guensler, an associate professor at Georgia Tech who organized the Commute Atlanta project. Over the summer, his team installed GPS units in 500 Atlanta-area vehicles from a randomly selected cross section of 285 households.
For the next year, he will use information from the tracking boxes to create a detailed log of where every car went and when, how fast they traveled and the places they got stuck in traffic. Plus, 350 of those machines are collecting engine performance data, which can determine when drivers are shifting gears, when they are slamming on the brakes and when they are putting the pedal to the metal.
Guensler said this will be one of the most detailed traffic-pattern studies ever completed, and the information he gets will be far better than the trip diaries that have been used in the past to evaluate local driving conditions. The diaries depend on individuals manually filling out logbooks every time they get behind the wheel, and are notoriously inaccurate.
The data will help city planners determine which streets need more stoplights, which are notorious choke points and which are becoming popular shortcuts. "We will be able to find out whether the transit system is sufficient to support the level of expected growth in the region," he said.
After collecting driving information for a year, Guensler plans to move into a second stage of his study, which will use the baseline driving habits of participants to determine auto insurance rates. Although that phase is not currently funded, and may not be carried out as originally planned, Guensler said his research could give the insurance industry consumer response to the concept.
For example, if the GPS box records a daily slog to creep through 20 miles of traffic during rush hour, and the driver begins to carpool and eliminates that high-risk commute, the driver might receive a discount on his insurance rates. Guensler said that could provide an incentive for consumers to support mileage-based pricing.
Conversely, if the tracking device documents a habit of speeding through neighborhoods with schools or retirement homes, the insurance company would probably think twice before lowering an individual's rates, and might even raise them.
"I think the insurance companies would be interested in this kind of information," he said. "It can make pricing more efficient, and anything that makes pricing more efficient is good for them."
However, David Sobel, general counsel for the Electronic Privacy Information Center, warns that if mileage-based insurance plans become common, the insurance companies may not be the only ones looking at the tracking data. "Once that information is collected, it is very hard to control access to it for secondary uses," he said.
The government might be very interested in tracking the movements of specific individuals, under the mantle of homeland security or law enforcement, Sobel said, while marketing organizations could spot residents from wealthy areas who regularly pass by a specific shopping center.
"Subjects may consent to the primary use of the data," he said, if they think they will get a lower insurance premium. "But they may not have any idea of the secondary uses of the information."
Guensler agrees privacy is a significant issue in mileage-based insurance plans. If the idea becomes a reality, he suggests an independent agency could be created to warehouse the information, doling it out only to insurers, and only on a need-to-know basis. "The question is who owns the data," he said.
In the case of the Commute Atlanta project, created as a confidential academic research project, he said Georgia Tech owns the location information, but is obligated to protect the privacy of every participant. "It would take a court order to get these logs, and even that would go through a number of appeals," he said.
If the insurance industry does pursue mileage-based premiums, it remains unclear whether GPS will even be a necessary component.
"Our attitude is that there already is a way to measure how many miles you're driving," said Patrick Butler, director of Cents-Per-Mile Choice, an Austin, Texas, advocacy group in favor of pay-as-you-drive insurance pricing. "This is a technology that has been available for years: the odometer."
