iPhone tracking for Pay As You Drive car insurance in California

Farmers' Group in California said yesterday that they will use iPhones and Blackberries to track cars under California's new Pay As You Drive car insurance regulations (Bloomberg). That is really fascinating. The iPhone has all kinds of technology in it that makes this an interesting proposition, at least in theory.

I would be quite keen to know how they are planning to solve the issue of the iPhone only running one application at a time. You can't expect customers to switch on the application that tracks them every time they get into the car.

At least one other iPhone application that have recently been published for insurance, by Nationwide. It deals with claims handling. It is basically an accident handling kit on your phone. Very cool. As per the website, the functions are:

• Calls emergency services
• Helps you collect and exchange accident info
• Stores your insurance and vehicle info for easy lookup
• Locates Nationwide agents near you
• Takes and stores accident photos
• Converts your iPhone into a handy flashlight
• Helps connect you with towing services*
• Helps you start the Nationwide claims process*
• Finds Nationwide Blue Ribbon^SM Repair Facilities*

If you know of any other iPhone apps for insurance, please let me know!

The iPhone tracking article is below for completeness, or can be found on this link.

Zurich Financial’s Farmers Unit to Track U.S. Drivers

By Carolyn Bandel

Sept. 24 (Bloomberg) -- Farmers Group Inc., the U.S. unit of Zurich Financial Services AG that bought AIG’s auto-insurance business in April, plans to lower premiums by charging drivers for coverage by the mile, measuring car usage by iPhone and BlackBerry.

The insurer wants to base insurance costs on miles driven to “charge the right premium for the right risk” and keep premiums low, Mark Toohey, a spokesman for Farmers, said in a telephone interview from Los Angeles on Sept. 22. The company is considering offering a tracking product using mobile-phone technology at the end of this year or early in 2010.

Voluntary “pay-as-you-drive” regulations that allow insurers to base premiums on actual miles driven were announced Sept. 3 by the commissioner of the state of California Department of Insurance, Steve Poizner, who is responsible for enforcing insurance-related laws and previously founded SnapTrack Inc., which pioneered technology that put GPS receivers into mobile phones.

“We see some potential in California for using this type of technology because of California’s unique auto-rating regulations, which focus heavily on miles driven,” said Toohey. “Farmers doesn’t support the use of any technology which would require a customer to be tracked.” The company said the option to be tracked would be made available to customers and only used with their agreement. U.S. insurers are regulated separately in each state.

Insurers have been testing technology to offer pay-as-you- drive insurance in countries including the U.K., the U.S. and the Netherlands. So far, such insurance lets motorists prepay for the miles they expect to drive during the term of coverage, as with Polis Direct in the Netherlands, which is part of the Dutch automotive trade association BOVAG.

‘Very Costly’

Aviva Plc, the U.K.’s second-biggest insurer by market value, offered a policy that fitted a blackbox tracker device into cars using so-called telematics technology to record journeys. The insurer stopped offering the product last year because it “had to bear the cost of the box and the operating model was very costly for Aviva,” Erik Nelson, a Norwich, U.K.- based spokesman, said in a telephone interview today.

“We’re looking at various technologies and have set for ourselves an internal deadline for going to market with a usage- based rating option for our customers,” Toohey said. “Voluntary tracking measures and technologies may have as much relation or even more relation to accident risk as miles driven. Examples of these risk measures would be car speed, hours of day a customer drives or driving in congested areas.”

Separately, the Los Angeles-based Farmers launched last week an iClaims application for customers who used iPhones or iTouch. The application allows Farmers customer to immediately file an insurance claim.

To contact the reporter on this story: Carolyn Bandel in Zurich at cbandel@bloomberg.net