Could pay-as-you-drive insurance curb distracted driving?


A growing number of auto insurers are designing and selling usage-based insurance policies (commonly known as "pay as you drive" insurance). Such policies let drivers potentially lower their premiums in exchange for allowing their insurance companies to keep a closer eye on them. Via electronic monitoring devices (like Progressive's "Snapshot" device), insurance companies can know when you're speeding, at what time of day you usually drive, how many miles you drive and whether you engage in risky behavior like rapid acceleration or hard braking.
So why not monitor distracted driving as well? A recent white paper from anti-distracted driving technology company ZoomSafer suggests auto insurance companies would do well to add cellphone use as one of the relevant driving habits for pay-as-you-drive policies.
Spying on cellphone use
The risk that distracted driving poses is not tough to sell to insurance companies. But monitoring a driver's cellphone use habits is a different matter.
Yet, thanks to technology, there are ways for an insurer to determine whether cellphone use caused a crash, according to ZoomSafer. Some video surveillance systems, for example, can be set up to start recording whenever the vehicle swerves or whenever the driver brakes suddenly -- and could be used to obtain evidence that a driver was using a cellphone at the time of the incident. But such technology is better suited to owners of trucking or delivery businesses who want to keep an eye on their drivers. It doesn't do much for insurance companies who want to know a driver's "historical and habitual" cellphone use, according ZoomSafer, and it wouldn't prevent drivers from using their phones in the first place.
ZoomSafer provides two possible solutions: active prevention and passive monitoring.
Active
The active approach would include an anti-distracted driving smartphone app and onboard device that would deactivate the cellphone whenever the vehicle is in motion. Insurers could even use customized, branded auto-reply text messages that would respond to inbound text messages and emails to let the sender know that the recipient is busy driving. Drivers who agreed to such an arrangement would be rewarded with premium discounts.
Passive
A more passive approach would use telematics -- the integrated use of telecommunication devices and technology -- to record and store information about cellphone use while driving. In essence, technology onboard the vehicle would record when the car is being driven. That data then would be matched with cellphone billing data. If the onboard technology frequently picks up on any sudden braking or sharp steering at times when a cellphone is being used, it's likely that the driver is regularly distracted. With passive monitoring, motorists still can use their cellphones while driving, but they would face higher premiums as a result.
The appeal of usage-based auto insurance
Minimizing insurance claims is key to auto insurer profitability. As such, auto insurance companies have consistently focused on identifying low-risk drivers and promoting safe driving habits.
According to a recent analysis of usage-based insurance from consulting firm Towers Watson, the majority of insurers soon will offer their own versions of pay-as-you-drive insurance. And, given the financial struggles of so many Americans, some motorists likely would be willing to forgo using their cellphones while driving if there were an immediate financial incentive. As it becomes easier and more reliable to monitor driving habits, usage-based insurance will become even cheaper for the safest drivers and more valuable to insurance companies.

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