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Car Insurance Based on Driving Habits from GPS


Would you be willing to turn over a GPS tracklog of your driving to your car insurance company? What would they think of your driving habits? Would you get a discount for being a good, safe driver? Or would your rate double? Companies are starting to offer products which will evaluate the cost of your car insurance based in part on your driving habits.

While habits like aggressive driving are not often talked about with these new insurance plans, other factors are considered such as:

  • How far you drive each month
  • What time of day you most frequently drive
  • What types of roads you drive on

These factors then determine how much your insurance will be for that month. The system is part of a pilot program in the UK called “Pay As you Drive” and has been operating for a couple of years with about 5,000 participants. The system has logged nearly 100 million miles of activity.

“By using new developments in GPS and data warehousing to charge customers for actual usage and risk, ‘Pay As You Drive’ insurance is a great example of how technology can bring unexpected benefits to customers. The data warehouse is a critical component in the smooth running of the service.” – Alex Robinson, CIO, Norwich Union

GPS devices track drivers and bills are calculated and mailed monthly similar to a cellphone bill. So what do you think? Is this for you?

2 Responses

  1. The trackbacks on my blog aren’t working quite right. So here is a direct link.

    Tim Hibbard - November 6th, 2006
  2. i think using gps to track drivers habits would be useful if the driver could review their driving style through the collation of data from the road journey. the driver can then analyse any bad driving habits that would increase the fee of an insurance policy and have the opportunity to change their style accordingly to reduce that fee when reviewed by insurance companies.

    mark - April 13th, 2011

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