Verified mileage and GPS tracking

| Comments (6) | Misc
Jennifer Granick writes about EFF's concerns over the use of GPS measurements for insurance pricing. (EFF's comments are here.) The background here is that your risk of an accident is correlated to the amount you drive which is why your insurance company asks how many miles you drive a year and occasionally asks what your odometer reading is. The proposed new regulations include a "price by mile" option, in which insurance rates would be much more tightly coupled to your driving than the current low/high mileage setup. They also include a provision to allow "verified actual mileage" via "technological devices provided by the insurer or otherwise made available to the insured that accurately collect vehicle mileage information." EFF's concern is that these devices may collect a lot more than mileage (e.g., where you drive, how you drive) and that that could be used by insurance companies to make policy decisions.

As EFF observes, cars are already fitted with a device for accurately measures how far you've driven, the odometer. It's worth asking what advantages a new device offers. There are a number of possibilities:

  • Remote read/Timeliness— The insurance company only gets your odometer reading very infrequently (yearly or so). One could imagine adding a new device which would regularly report back to the insurance company (e.g., via the cell network) so they would know how much you had driven each month.
  • Unforgeability— There's nothing really stopping you from lying about your odometer reading. The proposal includes a clause about having a verifiably data photograph of your odometer, but it's not like that wouldn't be easy to photoshop. In principle, one could imagine an external device using cryptography to verify its results. Of course, that device would then need to be attached to your car in a way that prevented it from being removed and left at home while you drove to Vegas.
  • Accuracy— Odometers aren't really that accurate since they just count wheel revolutions. Tire size, inflation, etc. can produce errors. Also, they're often not that well calibrated to start with. That said, however, GPS mileage readings aren't really that accurate either, especially if there's a lot of interference in "urban canyon" type environments. My GPS routinely misreads by a factor of 5-10% on backpacking trips, which is about what I remember hearing for odometers.
  • Richer data collection—A GPS device offers the possibility of collecting a lot more data, including where and how you drive. Obviously this might be useful for actuarial purposes.

From a technical perspective, then, the major advantage of a new device is precisely the one that offers the most privacy threat. In particular, one could imagine adding remote read and unforgeability to an odometer-based device, without any GPS at all. If the insurance companies insist they need to add their own device, it's certainly reasonable to ask exactly what data they are collecting.

6 Comments

A 'pay as you drive' scheme based on GPS tracking was tried in the UK a couple of years ago. It charged more for rush hours, and very late night driving:

http://www.aviva.co.uk/media-centre/story/2840/norwich-union-launches-innovative-pay-as-you-drive/

But it was cancelled in the end:

http://news.bbc.co.uk/1/hi/programmes/moneybox/7453546.stm

Some of the quotes are good: "The customers don't like the whole Big Brother attitude"

If I was an insurance company, and I had that kind of driving data, the first thing I would do is get software which could map the vehicle's location to the highway system and look up what the speed limits are where they're driving. Then you can correlate the reported speed with the speed limit, and adjust the person's rates depending upon their tendency to obey the speed limit.

Sounds reasonable, but I would not trust a car insurance company to do that in a fair way.

I don't get it--the regulation appears only to require insurance companies to *offer* this new type of insurance. Presumably the point is to allow low-income, low-mileage (and hence low-risk) customers to pay rates commensurate with their risk, rather than a more expensive all-you-can-drive flat fee. Higher-volume (or privacy-obsessed) drivers would still opt for the latter, which comes without monitoring. So what's the problem?

I don't understand why you need (or want) a GPS device to make "pay-by-mile" work. Couldn't the company just write a policy which covered you for (say) M miles, starting when the odometer reads X and ending at X+M? I can't see how you'd cheat that system without tampering with the odometer itself, which IIRC, is already illegal.

That said, as I don't drive very much, I'd love a pay-by-mile policy and might consider one that came with a GPS, especially if you could use the same unit for navigation.

Dan:
That's a policy question. I'm addressing the technical issue. That said, this isn't a free market and the entire premise of this sort of insurance regulation is to rule out some types of actuarial discrimination (e.g., gender), even on a voluntary basis. So, I don't think there's anything inherently odd about objecting to this particular criterion once you've bought into that general framework, especially in the case where it's probably not obvious to consumers what the privacy considerations are.

Matt:
You're right, you don't need a GPS to do mileage-based billing, which is why it's a little suspicious that the insurance companies want it.

I don't understand why you need (or want) a GPS device to make "pay-by-mile" work. Couldn't the company just write a policy which covered you for (say) M miles, starting when the odometer reads X and ending at X+M? I can't see how you'd cheat that system without tampering with the odometer itself, which IIRC, is already illegal.

That said, as I don't drive very much, I'd love a pay-by-mile policy and might consider one that came with a GPS, especially if you could use the same unit for navigation.

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