Allstate Patent Uses Driver Scoring System For Auto Insurance Rates

Insurance giant Allstate recently filed a patent for a plan to calculate auto insurance rates based on a driver’s habits, rather than their driving records. The patent would allow the insurance carrier to use “telematics” data to determine auto insurance rates. The data would come from equipment installed in the vehicles, as well as from smartphones and other electronic devices. These devices measure behavior, such as speeding, tailgating and obeying road signs. The devices also record biometric data, such as heart rate, blood pressure and stress levels while driving.

Bad Behavior Could Bring Higher Auto Insurance Rates

The Allstate patent serves as part of the trend of “usage-based insurance” for auto insurance rates. Allstate’s Drivewise program, as well as Progressive Insurance’s Snapshot and State Farm’s Drive Safe & Save, record data related to the driver’s behavior on the roads. The insurance carriers then enter the data into a computer algorithm to calculate the policy holder’s auto insurance rates. The patent would extend the scope of the data to include a driver’s behavior around road signs, traffic lights and in various weather conditions.

Auto Insurance Rates and “Geotribing”

The insurance leader also filed a similar patent last year for groups seeking to reduce their auto insurance rates. The patent would employ a method the company calls “geotribing”. In a geotribe, each member of the group would encourage safe driving habits in other members via “real-time group reinforcement communications.” The objective would be to use a form of peer pressure to reinforce better driving habits, which would lower the auto insurance rates for the entire group.

Auto Insurance Rates and Data Security

A major concern of privacy groups lies in how insurance companies use data gathered from vehicles. Insurers have promised to use such data as part of their calculation of auto insurance rates. However, some critics have voiced fears that the data may either be used for other purposes or be sold to third parties without the driver’s permission. Both Allstate and State Farm announced plans to use driving data, along with data related to spending habits and credit histories, for targeted advertising campaigns.

Auto Insurance Rates May Increase for Non-Participants

While drivers have the option of not allowing insurance carriers to gather their personal data, such refusals could result in higher auto insurance rates. According to one of Allstate’s patent applications, the company could imply that drivers who refuse to share their data “would demonstrate less than ideal behavior” behind the wheel. Such refusals could justify the insurer charging higher auto insurance rates to non-participants.

Source: Huffington Post

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NOTE: This blog post is a news story and is not an endorsement of Arguello Law Firm by any party mentioned herein.