Allstate Insurance Tests Usage-Based Program on Employees to Make Everyone Safer Drivers

By Jacob Brown | July 26, 2012
Insurance company Allstate has a usage-based program that sees limited action. It's called Drive Wise, and chances are if you're from the Heartland where it's currently in use—Illinois and Ohio—or the Heartland South, Arizona, where all the Midwesterners go to retire, you're probably not too fond of picking up a technology that can track the way you drive. But Allstate is pressing on, and it wants to release the technology in 12 more states by year's end. So how does a company get around refining a technology like Drive Wise without a large sample size? It expands to crowdsourcing beyond its previous 11 million miles and 350,000 driving hours collected in-house. It expands to giving the device to more real consumers, but mostly still friends and family of employees. Yes, giving. Maybe even strongly, strongly incentivizing. Drive Wise works like this: You plug a little sensor into your post-1995 model year car's onboard diagnostics port, and you let the car record your driving habits, logging in online to see how your likely over-aggressive, multitasking driving skills stack up to everyone else's. Allstate gives all its drivers a 10-percent discount just for doing that. But by moving up the driver rankings by implementing safer driving behaviors, Allstate will reduce insurance rates by as much as 30 percent, given low miles driven and safe habits behind the wheel. Allstate says its initial users—employees—showed that just 25 percent of them were driving in the ideal "safe zone." But with Drive Wise, the test eventually pulled 75 percent of the participants to the more conservative side. And Allstate says that's good. "Our early experience with Drive Wise indicates telematics technology has the potential to save lives, reduce injuries and save millions of dollars in property damage each year," said Bob Otis, senior vice president of Allstate's auto product operations, in a statement. Beyond making drivers safer, what's in it for Allstate? Data. Lots and lots of data that it will be able use in order to adjust future rates for a diverse population and sell to third parties like automakers for research. If you're worried about a big company recording your every move, Drive Wise or a similar pay-by-use program may not be for you. And if you don't want Allstate profiting off your driving habits beyond your normal rates, it may not be for you. But if you're a low-mileage driver and think you could get away with having some lower rates, this program may not be evil incarnate. Source: Allstate