Usage based insurance

[cbgb]

But boy, it still rings the "big brother" bell big time in my head.

mine's a gong and dinner is SERVED.

fuuuuuck that. Next up - power company sticks a camera on my ass and monitors my shower usage.

[swbarnett]

would you take it up?

Hell no!



10 char

[Smifffy]

What about the argument that those who ride less often are less experienced/skilled and therefore more prone to expensive insurance claims?

The fundamental problem with insurance is that it is reliant on statistics. The fundamental problem with statistics is that they are open to interpretation.

The person who claims to ride 100,000 kms a year and is safer on the road than the guy who rides 3,000 kms a year may well be right.

A danage incurring event (as opposed to an accident) is not necessarily random.

Just ask Katman.

[warewolf]

If an insurance company introduced such an option in NZ, and assuming it was at least 30% cheaper than standard insurance (based on overseas examples), would you take it up?

Sort of. As mentioned before, it's already available here and I'm on it. Low mileage discount through John Baker insurance.

The person who claims to ride 100,000 kms a year and is safer on the road than the guy who rides 3,000 kms a year may well be right.

The higher-km rider is safer per km, but exposure is greater which leads to higher risk. However that ignores riding style, which probably has more influence. What about a rider who used to ride 100,000km per year, but now doesn't? If they apply their experience then they'd be a fairly low risk.

The most at-risk road user, on both distance and time basis, is said to be the not so humble pedestrian.

[jafar]

I like the idea of being able to track where a thief has taken my bike if stolen. Or bring able to track where I have been via the GPS.
I'm not so keen on the idea of a third party such as an insurance company having control of the data. It is a very small step from that to the police having access to the same information & writing tickets against you based on what the GPS has told them.

[p.dath]

Also, I think the km based is something that looks good on paper, but I'm not sure if it would be as effective in practice. Town commuting is far more dangerous per km than open road stuff in my experience. Also inattentive vs attentive road users would still be lumped together.

Some of the insurers were using GPS tracking. They can tell weather your km's are around town or on the open road.

The person who claims to ride 100,000 kms a year and is safer on the road than the guy who rides 3,000 kms a year may well be right.

I guess an insurer could argue that no matter how safe you are, the more you use the road the greater the risk of someone else having an accident with you ...

[bogan]

The fundamental problem with insurance is that it is reliant on statistics. The fundamental problem with statistics is that they are open to interpretation.

Indeed, and the more in-depth the interpretation, the greater the errors can be. Another thing to ponder, if insurance is able to gather vast amounts of data, and processing capability (talking sci-fi hypotheticals now), they could predict almost down to a person who will have accidents or not, so they would get massive bills while the rest get very little at all, basically removing the benefits of insurance altogether. Where should the line be drawn?

[avgas]

@ 30% cheaper.
NO WAY IN HELL

@ 80% cheaper it would be worth my time.

Some food for thought. WAAAAAY back in 1999 my 3rd party insurance (for any motorbike) was $19 / year
I was only 19 years old (i think I fail at maths), and I was on my learners. Admittedly my excess was a whopping $1500. But still $20 3rd party cover. I can't even get a ACC brochure for that price now days. And that was only 12 years ago.

[Smifffy]

As long as it doesn't get like that burglar alarm scam a while back.

Get cheaper premiums if you fit an approved burglar alarm. Forget to set it? Not covered.

"I'm sorry sir you were insured for 10,000 kms a year, and the assessor has found that you had actually travelled 10,020 km when you had your accident. Even though the Desert road was closed and you had to travel via Napier you should have called our 0800 number and bought the additional block of 5000 kms at the low low rate of half a nutsac."

[Hitcher]

I think that this would be really expensive. Most cover at the moment is based on general actuarial risk calculations that are based on a large biker population which includes those who travel big distances and those who don't; those who fall off, break their bikes and themselves; and those who get their bikes nicked or munted by others in the viscinity. Things like the purchase prices of bikes and replacement parts are also allowed for.

Even though owning a Harley or other thievable bike worth lots of money is calculated specifically from a bunch of risk tables, for most other things a whole lot of averaging goes on.

The biggest losers are riders whose biggest risk is rust -- those who own pre-2005-year bikes with less than 5,000km on the clock and who think that bikes are worn out once the 20,000km figure is reached. I love people like this, because they are subsidising my insurance.

If I was to pay insurance based on usage (average of 30,000km a year) I'd be hammered, as many bike-related accident figures are based on offs per 1,000km, and I'm more likely to have more of these in any given year than somebody who spends money on a plug-in battery charger does.

[ckai]

What about the argument that those who ride less often are less experienced/skilled and therefore more prone to expensive insurance claims?

The fundamental problem with insurance is that it is reliant on statistics. The fundamental problem with statistics is that they are open to interpretation.

The person who claims to ride 100,000 kms a year and is safer on the road than the guy who rides 3,000 kms a year may well be right.

A danage incurring event (as opposed to an accident) is not necessarily random.

Just ask Katman.

high k's travelled doesn't always mean high good experience. Someone could be a freak and an absolute natural so after, say 3000km they're more of a riding/driving god then someone that has travelled 500,000 kms with their eyes closed hitting every car on the way. They could also be a BMW owner and never choose the option of indicators for their car

Yes, there is an argument and general rule of thumb that the more kms you do the more experienced you are but the line insurance companies take in that you are more exposed to danger with higher k's is more accurate and almost fairer.

A similar argument would be 2 riders both travelled 5000km. One extensively trained, the other not. You can bet the trained rider has light years more "experience".

I have insurance for travelling under 5000kms per year. It gets me a 10% discount. It's not actually that much but I am still saving 10% because I only bring the bike out when I have time.

I think when you get into a crazy complex model like assessing rider behaviour, roads travelled, times travelled, the potential savings are only going to be realised by a VERY small minority. It's just too petty really and the statistical analysis cost to work that sort of thing out would take years to recoup (and be inaccurate )

[Gremlin]

As some have said, it sort of exists in the form of classic cover, if you do 5000km or less in a year... uh... I can do that in under a month.

I don't think it would work for me... I do about 45,000km a year, and my bike is just being repaired after damaging it to the tune of $18,500.

I do wish however, they would bear in mind I did 90,000km since my last incident, not 2 years

[Hitcher]

I do wish however, they would bear in mind I did 90,000km since my last incident, not 2 years

Hah! Good luck with that.

[swbarnett]

The higher-km rider is safer per km, but exposure is greater which leads to higher risk.

Only if the "safer due to more km" is completely offset by the "more exposure".

For example, someone who rides 100,000km annually but has a tenth of the risk per km (due to experience) than someone that rides 15,000km annually is safer overall.

[Hitcher]

Only if the "safer due to more km" is completely offset by the "more exposure".

For example, someone who rides 100,000km annually but has a tenth of the risk per km (due to experience) than someone that rides 15,000km annually is safer overall.

Yes, but they still do this in the same year. No difference in risk whatsoever from an insurer's point of view.