Technology and Car Insurance
A few big-name insurers are currently testing black box technology; this article explains the moral arguments surrounding its use.
Black box technology is not new in the world of car insurance. Norwich Union introduced it back in early 2005 when they trialled 5,000 customers with the technology. The aim was to monitor drivers' every move in order to offer them a type of 'pay as you go' car insurance. The boxes use global positioning systems (GPS) to monitor mileage and speed, on which customers would be charged a price per mile, but there have been other implications relating to the technology.
The technology has raised questions about morality - basically, if a driver is regularly exceeding the speed limit and could be considered a dangerous driver, should the insurance company inform the police?
At the moment, the information gathered is kept by the insurer; they have no obligation to hand any details over to the police. The only time that they are obligated is when a policyholder is involved in an accident and the police produce a warrant. For Norwich Union, to date they have only needed to hand information over once, when a policyholder was involved in a fatal accident, and in that case the policyholder requested it.
The only way that the police can get hold of the black box information is by taking a person to court because of speeding, already equipped with evidence. In which case, they wouldn't need the black box evidence anyway.
As a spokesman for Norwich Union said, they are only interested in the type of roads and the times of day that their policyholders are driving. They are not interested in the speeds, from an insurance perspective - as it makes no difference to the amount they can charge.
The insurer AXA has taken black box technology a step further in Ireland. Recognising that speed plays a large part in many accidents, they are currently testing a system called 'Traksure', essentially another GPS. It works by comparing the speed and location of the car to the particular speed limits on those roads. Drivers that stick to the speeding limits reap the benefits with lower premiums, whereas those that go over too frequently in any month get a warning letter in the post. If you consistently exceed the limits and get three warning letters, your premiums will rise, as AXA consider you to be at greater risk of being in an accident.
AXA policyholders will not have to worry about being prosecuted though, as AXA have pledged not to hand over any information to the police unless it is legally obligated to, and this would only happen if the policyholder was already caught speeding by another means. So AXA keeps quiet about their policyholders' speeding, even if they have evidence that they are breaking the law and endangering other people.