New "Black Box" StandardsBy Edward Cammarato | September 24, 2012
On three previous occasions, I've blogged about the "black box" standards that took effect on September 1, 2012. You can read my earlier posts here:
- Black Boxes: The Promise and the Problems (July 18, 2011)
- Black Boxes: The Bill, the Vote, and the Year 2015 (May 1, 2012)
- Black Boxes: The Problems and the Promise (July 18, 2012)
We at Verisk continue to keep an eye on all developments in this field — and how they will affect insurers and insureds alike. Here's a summary and an update.
How did we get to where we are today? After many years of study and evaluation, the National Highway Transportation Safety Administration (NHTSA) finally issued its rule on event data recorders (EDRs) — or "black boxes" — in 2006. It was supposed to take effect in 2010. NHTSA later updated its ruling, giving automakers until the first of this month to comply.
Meanwhile, car manufacturers have been voluntarily installing the devices, which are now in the vast majority of vehicles on the road. The new rule standardizes the information EDRs collect.
A recent "Floor Action" blog on The Hill website reported that attempts by the Alliance of Automobile Manufacturers and others to delay the new standards to September 1, 2013, have failed. The standards are now in effect for most vehicles with EDRs installed.
We're not aware of any legislation or regulations that will guide insurance companies on the use of EDR data. Current telematics programs and pilots are "opt in." That is, the consumer must agree to allow the insurer to install a device that measures driving behaviors — and to use the data — generally in exchange for some benefit, such as a premium discount.
Verisk will continue to monitor both telematics programs and "black box" standards. We'll be particularly interested in how the new standards affect both carriers and consumers.
Standardization may turn out to be a good thing because it should produce more universal or "portable" information. Consumers may voluntarily agree to share such information with insurance companies.
The telematics and black box space is really starting to explode. We observe many potential providers (including Verisk) working hard to understand the market and how insurers can deploy the emerging technologies.
Stay tuned. There's more to come.