The Rise Of Real-Time, Context-Based Insurance

A small insurance startup, Root, has launched a car insurance specifically designed for Tesla vehicle owners that reduces the price of the policy the longer the vehicle runs in autonomous mode, on the basis that this mode is much safer than driving manually. Thus, drivers who spend a lot of time on the highway or in conditions where they can activate the autonomous mode will pay less insurance. The idea is based on the fact that a vehicle is increasingly a connected platform, a smartphone on wheels from which we can obtain a constant flow of information. To sign up for a Root policy, which typically offers much lower prices than its competitors, you must download an app that allows the company to access GPS, accelerometers and gyroscopes data on your smartphone, making it possible for the company to evaluate your driving. After about two to three weeks driving with the app, enough for the average driver to forget about the app and go back to his or her typical driving habits, the algorithm has created a user profile that includes how much time the vehicle is in use, frequent destinations, whether drivers change lane excessively, their driving speeds, to what extent they respect traffic rules, or if they use their smartphone while driving, among many other things.