News & Commentary

12:40 PM
Kelly Sheridan
Kelly Sheridan
Commentary
Connect Directly
Twitter
LinkedIn
Google+
RSS
E-Mail
50%
50%

Can Insurance Discounts Lead to Fewer Distracted Drivers?

Auto insurer Good2Go offers discounted coverage to customers who install text message blocking devices in their vehicles.

Good2Go, an auto insurer specialized in minimum coverage insurance, has announced a new discount to customers who install text-blocking devices in their vehicles. The telematics-based strategy will improve driver safety and lessen the cost for customers.

Drivers who install the devices and provide proof of purchase to Good2Go will receive a 5% discount off bodily injury, property damage, and collision coverage per vehicle. The text blockers are designed to prevent use of cellphone functions such as text messaging, Internet browsing and email. Other apps and outgoing calls may be blocked as well, depending on the device.

[ Telematics gains popularity: N.Y. Rolls Out Welcome Mat For Telematics. ]

The telematics-powered text blockers are small devices that can connect to the OBD-II port or behind the rear-view mirror of a vehicle, as Cellcontrol’s text blocker does. Good2Go is not particular about the type of text blockers its customers use.

Telematics has been growing as a means of rewarding good drivers. Esurance recently took steps to eliminate distracted driving with its DriveSafe program, which limits teenagers’ phone use and monitors their behavior on the road. MetroMile and Direct Insurance are utilizing telematics to offer discounts to users who demonstrate optimal driving behavior.

“We believe that families who would be inclined to install a blocking device will be safer, more responsible drivers, and submit fewer claims,” said Joe DeLago, CEO of Good2Go. “We back that supposition by reducing rates for such families, and think they deserve the lower rates they will receive.”

Good2Go’s initiative eases the financial burden on their core nonstandard customers, who often have difficulty obtaining affordable auto insurance they need to drive legally. It's another example of technological innovation prodding insurers to change the way they study and establish risk.

Kelly Sheridan is an associate editor for Insurance & Technology. Prior to joining InformationWeek Financial Services, she was a staff writer for InformationWeek and InformationWeek Education. Kelly has also written for trade publication Promo Marketing and a number of ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Jonathan_Camhi
50%
50%
Jonathan_Camhi,
User Rank: Author
2/18/2014 | 8:02:40 PM
re: Can Insurance Discounts Lead to Fewer Distracted Drivers?
When I use Google maps I always just set the directions before I start driving and then have the volume turned up for it to tell me the directions.
Kelly22
50%
50%
Kelly22,
User Rank: Author
2/14/2014 | 5:59:25 PM
re: Can Insurance Discounts Lead to Fewer Distracted Drivers?
Thanks, James. I agree that people who would install a device like this are likely safer overall, which is good for insurers. However, it'll certainly be tough to monitor this strategy and ensure that the devices are actually being used. While I think the devices are beneficial, and should be adopted by drivers, there are certainly techies out there who would invent some work-around just to get the discount.
Greg MacSweeney
50%
50%
Greg MacSweeney,
User Rank: Author
2/12/2014 | 3:34:09 PM
re: Can Insurance Discounts Lead to Fewer Distracted Drivers?
Yes, i imagine it will be hard to enforce and to make sure there aren't workarounds that make the text-blocking device useless.
JamesH461
50%
50%
JamesH461,
User Rank: Apprentice
2/11/2014 | 8:00:20 PM
re: Can Insurance Discounts Lead to Fewer Distracted Drivers?
Insurance companies are always looking for what they call Proxy Variables. Think of credit scores being an indicator of responsibility which will translate into predictable loss experience for them. The insurance companies that Good2Go is aggregating for probably think anyone who would agree to have this device would be a person who's interested in personal safety, which just might be a good proxy variable.

I don't know of any company who is doing this now; and I sell for some of the companies listed on Good2Go's site. The credit might be meaningless in the overall scheme of things as the company(ies) doing this might not be providing competitive rates and would't be the company Good2Go uses for quotes. Companies tend to use gimmick credits to attract customers when they can't provide rates to meet the market.

A man walks into a store and tells the grocer that he wants him to sell him eggs for $.50 a dozen, because his competitor across the street is featuring that price. The grocer asks the man why he doesn't go across the street for his eggs, because his cheapest eggs are $2 a dozen. The man says the store across the street is sold out.

"Oh," the grocer says, "when I'm out of eggs, I sell mine for $.45 a dozen.

The underwriters I've discussed this kind of credit with are afraid that techies will go around whatever blocking device is used.
Kelly22
50%
50%
Kelly22,
User Rank: Author
2/3/2014 | 5:35:12 PM
re: Can Insurance Discounts Lead to Fewer Distracted Drivers?
From what I can tell, Good2Go doesn't have much control over the tech specifics. They just want you to put a text-blocker in your car, and they're all a little different. I saw CellControl's blocker in action, for example, and that one only blocks the driver's phone use (except 911 calls). I'm curious about the directions myself, though, since I use GoogleMaps at least once a week. Maybe the driver would have to plug in directions, then put the phone on the passenger seat?
Becca Lipman
50%
50%
Becca Lipman,
User Rank: Author
1/31/2014 | 8:36:21 PM
re: Can Insurance Discounts Lead to Fewer Distracted Drivers?
Wow. Good2Go seems like such a practical solution, It will be interesting what portion of the population most readily adopts this device. Does it work for all phones in range? What if the passenger is looking up directions?
Register for Insurance & Technology Newsletters
White Papers
Current Issue
Slideshows
Video