Your Insurance Co. is Telling You How to Drive

Millions of Americans will be setting out on the nation’s highways to return home from Fourth of July (Independence Day) celebrations this weekend. At such times transportation experts emit words of caution given the still-too-high rates of fatal crashes in the U.S.

With approximately 100 U.S. citizens dying every day on U.S. roads it is no surprise that the driving ability of Americans has come under steadily increasing scrutiny. The reality, of course, is that the U.S. is fourth or fifth on the global list of highway fatalities behind countries such as China, India and Brazil.

As one of the most advanced and the largest economies on the plant, though, one might expect far better outcomes – particularly in the context of applied technology and analytics. Insurance companies have a particularly large stake in this game and have struggled to make a positive contribution to mitigating the toll of highway crashes.

It is for this reason that so-called usage-based insurance has emerged as a potentially powerful tool for rewarding good drivers with lower insurance rates. In fact, usage-based insurance – based on either smartphone apps or devices attached to vehicles as in the case of Progressive’s Snapshot program – has long been used in the rather mature and conservative insurance industry to disruptively lure away the lowest risk drivers from competitors.

There are multiple forces working against usage-based insurance throughout the world, not only in the U.S. The lowest insurance rates available in any market typically do not require any driver monitoring apps or devices and, more significantly, in most markets car insurance is either optional or simply not expensive enough to spur consumer interest in a monitoring-devices-for-discounts trade-off.

There are exceptions – such as young drivers or drivers with poor driving records for whom a usage-based program with a monitoring system may be the only option. The reality is that usage-based insurance programs represent an attempt by the insurance industry to improve its under-writing tools.

Most under-writing today is based on driving history and credit reports, neither of which represents an ideal source of data for risk under-writing. If insurers had their way, they’d be collecting a much wider swath of vehicle data in real time. Today, usage-based insurance analytics are typically based on time of day (of driving), amount of driving, “harsh” acceleration or braking, and, sometimes, left/right turns.

SOURCE: Allstate "America's Best Drivers Report"

Based on data collected from customer insurance claims and its own usage-based insurance program, Allstate recently proclaimed Brownsville, TX, as the safest driving city while identifying my neighborhood (Washington, DC) as among the least safe. Allstate’s annual “America’s Best Drivers Report” found Baltimore, MD, to be the least safe driving city followed by Washington, DC. The report further notes that out of 200 ranked cities nearby Arlington, VA, ranked 168th and Alexandria, VA, 192nd.

Allstate says Baltimore drivers average 4.2 years between collisions on average and 30.6 hard-braking events per 1,000 miles. Baltimore motorists are 152.5% more likely to be involved in a collision than drivers nationally, according to Allstate. (The company says the data was not used to set insurance rates.)

Washington, DC, drivers were only slightly better, averaging 4.4 years between collisions with 27.2 hard-braking events per 1,000 miles traveled. DC drivers are 142.3% more likely to be involved in a collision than drivers nationally.

This messaging effort from Allstate is part of a broader campaign from car makers and regulators to tell drivers how to drive or, worse, to suggest that humans can’t or shouldn’t be driving...at all. The National Highway Traffic Safety Administration blames drivers for 94% of crashes. It’s a fine line, but the implications are manifest in the rapidly growing market for active safety systems.

The National Highway Traffic Safety Administration has nearly exhausted the tools available in the passive safety toolbox for saving lives in vehicle crashes. Those tools include such passive vehicle safety systems as airbags and safety belts.

The next phase of crash prophylaxis is active safety, where cars will detect danger and take control. The battle lines are drawn. The marketing and communication efforts have begun.  The early results, however, are not promising.

Safety systems are increasingly taking control – steering cars back into their lanes or braking to avoid vehicles in traffic or pedestrians in crosswalks. We regularly see collisions avoided in television advertising – but we rarely see these systems explained – and, all too often – drivers turn them off.

Both insurance companies and car companies are trying to show us how to drive. I had a test drive in a 2019 BMW 3 Series last week with one of the most aggressive lane keeping systems I had ever experienced. The message from the car was clear to me, as I am a serial non-signaling lane changer: “Signal your lane changes or I am going to shove you right back in your original lane.”

That was good. But it is also the kind of thing that will propel a new car owner to read the manual (for the first time ever) and shut that system down.

I had coffee with an executive with Amtrak the next day – someone who deals with wheeled vehicles operating on fixed rails. His personal car, in which we took a ride, was a 2019 Subaru WRX STi – with a standard transmission, of course, and no fancy active safety features. No one or no entity is going to tell this executive how to drive.

But our cars and our insurance companies ARE trying to tell us how to drive, while some are suggesting we can’t drive. It’s true that vehicle sensors and processors are increasingly capable of sending and interpreting information faster than the human brain – but the proportion of humans prepared to relinquish control of the steering wheel remains low.

The key to reducing highway fatalities will be to find ways to support drivers without overly intruding on the driving task or violating privacy. It’s a very fine line. BMW’s lane keeping tech was a wake-up call for me – I really do need to signal before changing lanes. Is there an easier way to signal than flicking the steering wheel stalk?

After participating in a State Farm usage-based insurance program many years ago I am not convinced that insurance companies know how to drive. The mere act of discouraging harsh braking or acceleration, as many usage-based programs are designed to do, raises serious questions in the absence of driving context. And most such programs are designed to measure not to modify driving behavior – Progressive’s, in particular.

As you make your way home from Independence Day celebrations assert your right to freely control your vehicle by driving responsibly and with consideration for those sharing the road with you. If we don’t get this right as human beings, the car companies and insurers and regulators will be stepping in, as they already have, to show us how they THINK we should be driving. I’m not looking forward to that – even though I will admit to needing a little help now and then.