Dec 092013
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speed limit

Usage-based insurance (UBI), Pay-As-You-Drive (PAYD) and Pay-How-You-Drive (PHYD) are types of automobile insurance integrating into a growing segment of the automobile insurance industry.  Differing from traditional auto insurance, which focuses on past driving history and rewarding “safe” drivers with lower premiums, these new policies base their costs on monitoring present driving habits.  

Though less than half of all auto insurers offer such policies today, many industry experts predict that these new policies will see rapid growth in the U.S., with 20 percent of all vehicle insurance in the U.S. expected to incorporate some form of UBI, PAYD or PHYD within five years. 

These products trade off the promise of cheaper premiums, if the driver allows for a monitoring device (‘black box’) to be plugged into their OBD II port, which is an interface located below the steering wheel of most cars made after 1995. The first of these programs began with Progressive more than a decade ago, where mileage was monitored.  Assuming no accidents, if the mileage was low enough, the driver could expect some type of savings off their premium.  

Over time, technology has allowed insurers to gather more information on driving habits, including:

  • Number of miles driven
  • Driving times throughout the day and night
  • Where the vehicle is driven
  • Average speed
  • Hard breaking 
  • Hard cornering

There has been a lot of customer reluctance to purchase UBI, primarily because people don’t want their driving habits monitored, especially if they believe they are driving safely. Moreover, they consider their time in their cars personal and private.  Many consumer groups find concern with insurers knowing their location and driving patterns, for fear that their data will be sold or used in ways other than for pricing insurance premiums.  Still other groups believe that these ‘schemes’ are a new way for insurers to find greater profit margins.

Stepping away from privacy fears and corporate interest, one must recognize the all-too-real issue surrounding millions of drivers in the U.S. who speed each and every day.  Whether its the young reckless driver on the interstate, the business person driving to work each morning, or perhaps the parent running behind on dropping their kids at school, most everyone speeds to some degree.  

According to the National Safety Council’s report Focus on Safety: A Practical Guide to Automated Traffic Enforcement, drivers speed for the following reasons:  

  • They’re in a hurry
  • They’re inattentive to their driving
  • They don’t take traffic laws seriously
  • They don’t think the laws apply to them
  • They don’t view their driving behavior as dangerous
  • They don’t expect to get caught

The fact is that speeding is a major contributor to many accidents and injuries. The National Highway Traffic & Safety Administration (NHTSA) reports that speeding is involved in about 33% of all fatal crashes, and is the third leading contributing factor to traffic crashes. But while other contributing behaviors, such as driving while impaired/intoxicated and not wearing seat belts have been significantly reduced, speeding remains a consistent “challenge”.  

Placing officers in strategic positions to monitor speeding is at best a public service through a temporary and short-lived deterrent.  At worst, it is an inefficient use of police manpower and a tremendous waste of taxpayer money.

Moreover, many people erroneously think that when they pay an expensive traffic ticket that the money is all going to the county police department. Depending on state, a large part of every ticket goes to the state and then the court system.  It may surprise people just how little actually gets to the police department whose officer wrote up the ticket.

In recent years, the use of cameras to detect speeders has been used.  This has been shown to generate a larger amount of tickets and reduce police manpower. However, its shortcomings are the same of the police cruiser with a radar gun.   People WILL slow down in the monitoring area, but then they will speed up once they clear it.  The simple fact is that we can’t have cameras and speed monitors everywhere – or can we?



My proposed invention, A System for Speed Mapping and Reporting, allows for our present speeding ticketing and financial punishment system to work without so many manual and people-dependent processes.  It will be mandated for all monitored vehicles – in other words, ALL cars and trucks in America.  The program will be run by each state, whereby drivers are given a periodic ‘report card’ of their driving habits, delivered to them on a quarterly basis.  

The premise is that by mapping out all roads by connected sections of speed limits, the vehicle will be able to send its speed and its position to a satellite. From there, the information will be collected onto a database and put through a series of comparative measurements.  If for example, Bob Smith were driving his car for a 3-month period, this monitoring system would be able to know on every single occasion, when Mr. Smith’s speed in a particular stretch of ‘speed zone’ exceeded that zone’s required speed limit.

Since most everyone speeds, then it stands to reasons that everyone will be paying state penalty money from these reports, right?  Well not exactly.  

Like anything else, there will be arguments and determination on what constitutes a ‘safe driver’.  Is it perhaps only breaking speed limits by an average of less than 5 m.p.h.?  Is it breaking the limits of less than 50 speed zone areas per month?  What about those who violate speed zones in more residential/school areas?  All of this would need to be determined, as well as what happens when a driver is flagged out-of-state or when driving a rental car. Certainly, there would have to be a period of time to get drivers used to a such a monitoring system, prior to its actual release.  

Plus, what would be the fees associated with certain low, medium and high-scoring (penalized) drivers?  Should there be a significant penalty for drivers who are caught driving more than 25 m.p.h. over a speed zone’s limit?  If that happens many times, does it mean a potential loss of license?   This begs the question of how a monitoring system like this would know who is driving the car?  

Perhaps that may not matter if ultimately the quarterly reports and financial penalties are within reason.  But when a report comes out showing that a driver exceeded 20 mph in speed zones more than 100 times in three months, perhaps a biometric device to determine driver identify, coupled to the vehicle starting, may be needed.  Otherwise, dear old Mom and Dad can take full responsibility and penalty for their teenager’s driving habits when using their car.  Remember, we’re talking about a dangerous driver and the statistics on speeding and accidents are quite clear.

It is also likely that this invention could be tied into a web-based application, allowing drivers to keep accurate measurements of their current ‘driving scores’ in real time.  Imagine that a driver, through such an application, knows when they are heading toward a bad quarterly report score.  Could they conceivably reduce points by showing consistency in lowering their speeds over time and speed zones?   There is a lot of area for growth in training drivers to be safe, by having a monitoring program such as this in place.  

And what of those people ‘rushing’ to get somewhere because of their poor planning?  Simply stated, this program teaches them to be better organized. Many of these people are selfish, and seem to forget that we all share the road.  A concept that has been well lost over all the many years and incidents of drunk driving, speeding, reckless driving, and road rage.

How would automobile insurance companies fit into all of this?  

Since insurance companies do base their rates, in part, on when drivers get speeding tickets, this would obviously make some difference on premiums. However, I do believe that because states will be collecting far more money from drivers, perhaps there could be a mandate on just how much a premium could be raised.  After all, we do want to see the roads safer, especially by means of cost-saving technology.  But hardly at the expense of bankrupting the drivers of America. 

I can hear all the readers who are privacy advocates screaming out, “BIG BROTHER…LESS GOVERNMENT”.  I couldn’t agree more.  However, less police officers on the road, less speeding tickets, less court costs, less police officers having to spend their time in court, less court cases piling up, less government and law enforcement personnel needed ALSO means less government and a possible financial break to the taxpayer.  Couldn’t we all use a little tax break?

At the heart of this entire system is the simple rule that people make decisions for one of two reasons – either they want to avoid pain or gain pleasure. That’s why speeding tickets, at least to some extent when given, do get people to drive slower.  Unfortunately, this is temporary and altogether lost on the millions of drivers who are not regularly caught and ticketed.  Why not use this motivation for the good of society and the safety of our roads?  

There’s nothing unfair about penalizing drivers who choose to drive more dangerously.  It’s a fair system, both for the 65-year old grandmother driving her Toyota Camry, as well as the 19-year old driving a his new red sports car. All drivers will have the same chance to pay or not pay, depending on how they choose to drive.  Plus, truly reckless drivers won’t have to rely on their good luck, as they are flagged all the time.  

So much for those fancy radar detectors!



  10 Responses to “Speed Mapping and Driving Reports”

  1. Steve,

    Interesting thought here.

  2. Interesting idea, conceptually better than what we have today. You talk about all the ‘less’es and the tax break, but I’m not sure you’ve adequately acknowledged the cost of the infrastructure to accomplish mapping and reporting so it’s not clear to me what the net gov cash flow or tax revenues are. This is clearly Socialistic and the conservative in me likes the benefits but not the big brother implications.

    • Terry,

      Thanks for commenting on this article. Hopefully, it will be the first of many I write.

      It seems socialistic to be sure. Who the heck wants to be monitored anyway? Perhaps those who believe that the NSA has their best interests at heart and that they have nothing to hide anyway.

      I’d like to pose a thought here. What is the difference between monitoring driving habits which are breaking the law vs. monitoring health care claims and associated medications taken/diagnoses rendered? In some way, both are used to determine risk and pricing.

      Per infrastructure, there is no denying that there would be a lot of cost involved, tied into taxpayer money. But think about the fact that police officers would never have to sit on roads, drive after speeders, give tickets, have tickets processed, have traffic court, etc.

      Of course the flip side here is that if we eliminate jobs and lots of speeding tickets, we could potentially eliminate a lot of municipal/court jobs too.

      I think that it would be interesting to create a reasonable pricing model (on these reports/penalties) and make a rough determination as to cost/benefit.

  3. I have significant problems with governmental monitoring in general, but in particular I have a problem with reporting devices which, by nature, are going to have flaws and issues that will lead to hours and hours of contesting inaccurate reporting, improperly imposed penalties, improperly inflated insurance premiums and threats of loss of license.
    How will these devices respond to changes in weather and road conditions? How accurately are these devices going to track, for example, an interstae as opposed to a parallel frontage road?
    Believe it or not, there are a large number of people who take their cars to tracks, not necessarily for racing but for increased high speed driving and cornering skills. Those classes and driving sessions entail hard braking, hard cornering, skid pads, high speed driving and the like in a controlled environment, off of public roads. Still the device will report the activities.
    There are still a number of open road races in the US, legal races against time where the road has been closed to public traffic with control given to the race organization. None the less, the trust monitoring device will report high speeds, potentially in excess of 100 mph, hard cornering, and hard strait line braking into corners.
    I could list many more reasons for not imposing mandatory monitoring devices on the American Public. I have no issue at all with allowing installation of these devices for those that want them.
    The idea is invasive and subjects everyone to governmental supervision in yet another key aspect of life. I don’t like this any more than I approve of kitchen appliances that transmit use information to the power companies and, of course, the government. A perfect example of governmental interference and intervention comes to mind in the recent debacle frequently referred to as Obamacare. One has only to look at that alongside the privacy invasions by NSA, the increasing use of drones in the U S, and the continual breaches of data security to see why yet one more step down the road to the nanny state is not going to be a welcome addition to the governmental arsenal.

    • Appreciate your thoughts here.

      First, you’ll get no argument with me on Obamacare. I thought that invading Iraq (on the basis of a contrived ‘WMD’ story) was the worst decision ever made by a President. But this one will sting us directly in our wallets and quality of life – plus, it will be ongoing.

      I really like your thoughts on some of the aspects of driving, such as driving school, but as you said the roads would be closed – hence, the system would be updated to void drivers participating. Yes, I know I make it sound easy – but its a blog.

      I don’t agree with the comparison with electric appliances because when you speed on public roads you are breaking the law, plus there is substantial data to point to speeding as a contributor to needless auto injuries and deaths.

      NSA is not my cup of tea either, as I view it as an unknowing invasion of our privacy. With this monitoring, a driver would know they are monitored all the time. Civil liberties aside, I think deep down, most drivers know that roads would be safer if everyone drove in line with speed limits. However, at some level is does present a major inconvenience in lifestyle and planning.

  4. Interesting thoughts, but nothing like kicking the “bucket of controversy” off the back porch at the outset. It is a “BIG BROTHER” approach but the way we seem to be moving. Some good data mining and data exploratory approaches will make it plausible and perhaps fair. Insurance companies are in business to make money from the overall risk assumed and the less guessing on pricing the more fair it becomes.

    • Agreed on all point John. I would say that it would be the states making the bulk of the money, but insurers could certainly find ways to ratchet up premiums, as applicable.

      I thought of this because I am so sick and tired of fast reckless drivers simply not being accountable. Perhaps the fines would only be for those driving reckless…we’ll see.

  5. I’ve had two “speeding” tickets in my lifetime of driving nearly 45 years, and in both cases I swear that I wasn’t exceeding the speed limit, although the officer said that his “radar system” could prove it. Here in Idaho, the fines are so minimal that it’s just easier to pay them rather than fight “the system”. Although the prospect of the Dept. of Motor Vehicles, the police and the insurance industry teaming up gives me a bit of pause.

    On another subject, sort of related, for the past two years, I’ve worked on the market development of a technology / device when implanted anyplace in any vehicle will disable any cellular device from texting until the device is more than ten feet away from the vehicle. You wouldn’t believe the push back we got from “don’t tread on me” citizens and groups.

  6. Joe, great to hear from you!

    Perhaps in more rural areas it wouldn’t be as prevalent. Per your technology, take a look at the new article from Nathan Golia at Insurance and Technology:

  7. Τhere is ԁefinately a lot to know about this topic.
    I love all of the points you have made.

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