Charged Based On Behavior?

A few weeks ago, South Pacific airline Samoa announced it would start charging based on its passengers total weight (person’s weight+luggage weight). I don’t think anyone was shocked as the idea has been discussed for a long time. It makes a lot of sense in a way because weight is one of the major factors that determine the airline’s costs (in terms of fuel especially) so charging based on that does make some sense.

Then, the other day I read about some car insurance companies that are starting to experiment with a device that tracks how you drive, your speed, etc. This could help them take down rates for safer drivers (and while they don’t talk about that part, it would also help them raise prices on the others).

Thanks to technology and smartphones, it’s becoming much easier to gather and use data about how we live our lives which in a way is a dream come true for insurance companies. You’d think that how you drive should be a much bigger factor in your car insurance premium than how old you are or if you are a man or woman. I think everyone would agree but that was very difficult to track. Over time, it has become easier.

This will certainly generate some interesting problems. First off, most of us think we are above average drivers (including yours truly! haha) but I also know that I sometimes go over the speed limit which would probably give my insurance company a reason to increase my premiums. What if I refused to be “tracked”? That could probably also be a reason to increase it. Will it end up being more expensive for me to get health or life insurance because I sometimes eat fast food? All very intriguing questions!!

It will be very interesting to see how these things will evolve over the next few years..! What are your thoughts on insurance companies gathering additional data from its users?

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