Insurance Discounts For Software That Won't Deliver Calls To Cars In Motion

from the so-that's-how-it-works dept

Remember how we couldn't figure out who would ever buy some new software that would stop calls from reaching mobile phones that were in motion? The (weak) idea behind the software is that it prevents drivers from accepting phone calls. Of course, it seems cheaper and more effective to just ignore your phone while driving -- or if that's too difficult, to just turn it off while driving. So it seemed difficult to believe that anyone would actually pay for such software.

Except we didn't count on one thing: car insurance companies.

Apparently Nationwide Insurance will (seriously) give drivers a discount on their insurance for buying the software. So, effectively, this is just a slightly indirect transfer from a gullible insurance company to a software company, but probably won't do much to actually stop people from yakking while driving. It's admirable to try to decrease dangerous driving habits, but this software is a gimmick, not a real safety technique.

Filed Under: driving while yakking, software
Companies: nationwide insurance


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  1. icon
    Derek Kerton (profile), 20 Oct 2008 @ 3:52pm

    It's Not About Insurance, It's About Safety

    I should disclose that I am on the Board of Advisors for Aegis, so I have bias, but I'm also informed and able to clear up some of the misconceptions here.

    Aegis, which built the technology behind this, has thought through pretty much all of the issues that Mike has against it, and also all the "gotchas" that are listed in the comments.

    There are no kickbacks. Get the conspiracy theorists a warm cup of soup so they can mellow out. Insurance companies also offer discounts for good grades - do you also think that schools are offering them kickbacks? But yes, there is a business model developing among wireless carriers, Aegis, and customers who choose the service. Insurance companies are not likely to be in the model directly, but their discounts are something Aegis has worked tirelessly to convince them to offer. Obviously it benefits Aegis, and getting this level of endorsement is an immense step forward.

    Aegis' service will be sold through wireless carriers, targeted at parents of teens and employers of a driving field force. These two groups pay the insurance premiums, and the full costs of any "distracted driver" accidents.

    In the last post at Techdirt on the subject, I commented "Insurance firms are very much on board with this service, and are likely to offer discounted premiums to families/companies who can prove they subscribe." I'm quite disappointed that Mike doesn't seem to have read that comment. I couldn't disclose the Nationwide announcement, and don't suppose that Nationwide is the only insurance firm on board.

    The service's method is to re-route calls politely with a recorded agent (IVR) when the person is driving. This prevents the distracting ring, interruption, conversation, fumbling for a headset, etc. As people above have indicated, often compulsion drives the 'ring->answer' response, not good judgement. Aegis allows the bill payer to supply their judgement to the 'answer' decision.

    But what if the driver is in an emergency situation, and needs to make/take a call? Or what if you are simply a passenger? Well, of course there is an 'over-ride' feature that will allow users to place AND receive calls. The catch is that using the over-ride will trigger an SMS or other message to the bill payer. Absolute power to place or take a call always remains with the phone holder, but they are accountable. And, NO, kids will not be able to game the system because they are technical "wizzes". This isn't a Playstation with cheat codes, and it's not even resident on the phone itself - it's in the telecom network.

    I understand that many have an initial negative reaction to "their calls getting diverted". When I first met the Aegis founders three years ago, I cringed at their idea. I thought "You're going to go into cellular companies and try to convince them to offer a service that reduces people's use of cellphones?" But they convinced me of the business model, and they have done yeoman's work to get endorsements from major insurance brands, the NHTSA, and a multitude of other highway safety advocacy groups. So now carrier's have a target market: parents and employers, they have a safety-raising product that insurance companies support with direct discounts. That's an innovative product with a good business model and a real shot at succeeding. Any business is a gamble, but succeed or fail, isn't Aegis the kind of innovation that Techdirt is supposed espouse?

    BTW, on the last Techdirt post about this, comments #
    2, 4, 6, 10, 18, 20, 25, 30, 33, 35
    all supported the Aegis idea as having appeal. That's a very high number, especially based on a Techdirt post that positioned the idea very negatively. Sounds like a market...

    Derek Kerton,
    Occasional Techdirt Blogger
    Telecom Consultant
    www.kertongroup.com

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