Slamming on the brakes? Doing 100 mph on the highway? Maybe you won't — if your car insurance company is watching you.
Allstate Corp. has launched a voluntary program that uses a device installed in a car to reward safe and low-mileage drivers with savings of up to 30%.
The auto insurer plans to expand the program, Drive Wise, from Illinois to other states as early as the second quarter of 2011. A spokesman said timing for California had not been set yet.
Drive Wise participants get a small, wireless gadget — about the size of a pack of cigarettes — that plugs into the vehicle's onboard computer through the diagnostic port, usually under the dashboard.
For consumers concerned about Big Brother, Allstate said the device tracks only factors used to calculate a driving score, including mileage, hard or extreme braking, and maximum speed. Speeds of more than 80 mph hurt the score.
Allstate policyholders get an immediate 10% discount for enrolling. Later policy periods use a performance rating, in which driving behavior and total mileage determine the discount.
Other insurers, including Progressive and State Farm, have also begun using devices to help track driving, but the industry trend raises some longer-term questions and concerns.
Frederick Lane, author of "American Privacy: The 400-Year History of Our Most Contested Right," said he sees few problems with Allstate's program, provided that it's collecting only the information it says it's gathering and that the program remains voluntary and offers benefits to drivers.
But the program raises several potential longer-term questions, Lane said.
"In the event of an accident, who has access to this data? Could an attorney ask for it in discovery for a personal injury lawsuit? Could the police subpoena it as part of a criminal investigation? Could any of this information be useful to a government agency?" he said.
It's important for policyholders to remember that these are not anonymous driving statistics, but actual data about their behavior, Lane said.
"The question is whether the discount offered on insurance outweighs the other potential uses of the data down the road," he said.
Allstate said its rates won't go up based on the behavioral scores, but discounts of up to 30% can be earned by drivers with the safest driving and low-mileage scores.
In designing Drive Wise, Allstate said it conducted extensive consumer research. About 300 volunteer workers logged almost 2 million test miles. In the course of one test measuring hard stops, aggressive starts and swerving, the percentage of participants scoring in the ideal "safe zone" tripled to 75%.
Allstate believes that, adopted broadly, Drive Wise could save thousands of lives and millions of dollars in injury losses and property damage annually.
On the surface initially, Drive Wise looks harmless enough and will probably benefit lower-mileage drivers and those who exhibit safe-driving habits, said Jim Fish, executive director of the National Assn. of Professional Allstate Agents.
But "there can be no question that Drive Wise will become much more sophisticated, making it possible to track nearly everything a driver does," Fish said. "Allstate may be claiming that the behavioral ratings will not increase rates, but we believe policyholders with poor ratings" could see their policies canceled.
Fish also envisions the day when such programs probably won't be voluntary.
Progressive has a program similar to Drive Wise, called Snapshot. State Farm offers its California customers who have the OnStar computer-communication system in their cars the opportunity to receive discounts based on mileage. Called Drive Safe & Save, the program was rolled out this month.
"We are not, however, collecting other data from the OnStar devices," State Farm spokesman Dick Luedke said.