“Smartboxes” May Have Negative Consequences for All Insured Drivers
Recent newspaper articles have described the introduction of so-called “smartboxes” that will assess behavior behind the wheel in order to potentially lower insurance premiums for young drivers. While this sounds like a win-win situation for young drivers, smartbox manufacturers, and insurance companies alike, several questions about smartboxes need to be answered to ensure that the introduction of these boxes does not have negative consequences for all drivers.
A “smartbox” is a device which collects and transmits a variety of information not only about a driver’s location, but his or her driving habits as well. Smartboxes collect information on how corners are taken, how suddenly or gently brakes are applied, the length of drives relative to rest periods, and even G-forces that build up within insured cars. Based on these complex data sets transmitted to the relevant insurance company, drivers’ premiums are lowered (or raised) accordingly.
The first concern that comes to mind about this process is its transparency. Will the data collected in order to evaluate drivers’ habits be released to the drivers, as well as the mathematical formulas used to evaluate it? In the event that an insurance company decides to raise a driver’s premium based on smartbox data, the driver must be given all of the relevant information in order to contest the new rate. Without this basic procedural safeguard, drivers should question strongly whether a smartbox should be installed in their car.
A related concern is the relationship of smartbox-equipped drivers to the rest of a company’s insurance pool. If the use of smartboxes by some of an insurance company’s policyholders results in changes to driving behavior which are seen as more desirable by their insurer, this will result in pressure to raise premiums among all other drivers in the insurance pool. Eventually, rapidly increasing premiums for people without smartboxes will lead to overwhelming pressure to have these devices installed in every insured car, regardless of the age of the driver.
This potential pressure to have smartboxes placed in every car raises concerns about the United Kingdom’s much-debated “surveillance society.” Certain sources indicate that the average United Kingdom resident is already monitored by more closed-circuit cameras than citizens of any other country, and some people fear that the data collected by smartboxes will be regularly turned over to government agencies or other private companies to track the whereabouts and habits of drivers. While at the moment there is little evidence of CCTV and other data collected through surveillance being used for nefarious purposes, the safeguards for preventing this from happening in the future are inadequate at best.
By openly and transparently disclosing the standards that will be used to evaluate driving performance among smartbox users, and by providing legally binding written assurance that insurance premiums for the rest of the driving pool will not be affected by the introduction of smartboxes, manufacturers can reassure the public about these products. Until then, we should carefully consider the consequences of smartbox implementation, despite the potential benefits for young drivers.
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