Car insurance: Getting cheap car insurance if you have a tracking device

Do you act differently when somebody's watching? Perhaps those crazy dance moves that you perform in the privacy of your own living room wouldn't be performed in the middle of a crowded dance hall?

Is it any different when you drive a car? Would you drive better if you knew Geico were watching your every move… every acceleration… every speed… every brake? If you knew Allstate were watching, would you drive so recklessly?

A handful of auto insurance companies are piloting a program where a vehicle electronic tracking system (smart meter) is connected to the car's electronic diagnostic system and works similarly to the "black box" on airplanes (similar to the device manufactured by Intelligent Mechatronic Systems Inc. of Waterloo, Ontario) The device, among other things, tracks the following:

• Speed
• Total distance that you drive
• Time of day that you drive
• Aggressive acceleration and breaking

The auto insurer will discount your auto insurance premiums for renewals based on the statistics uploaded from the smart meter.

I'm no statistician but i truly believe that this program makes sense; good drivers should get more discounts than bad drivers. But I think this program will go even further in creating better drivers and, thus, reducing car accidents and subsequent claims. It doesn't say this in the insurance company's marketing materials but this is what I think would happen: When you know somebody is watching (the insurance company) you consciously change your habits; in this case, your driving habits.

So you drive better, have less accidents, and then you get cheaper auto insurance rates. You win. The insurance company wins. Everybody wins! Car insurance: Getting cheap car insurance if you have a tracking device