Over the past year I’ve spent my economics blogging time over at the Mises blog. My latest entry discusses the concept of telematics and auto insurance companies.
The idea behind this particular computer & information-based telematics system is that insurance companies can factor in a number of other variables which can increase or lower premiums. They do this by relying on technologies like GPS which record speeds, locations, etc. and then relay the information via wireless technology to insurance companies whom in return compute premiums based upon factors such as traveling conditions, speed of vehicle, etc.
Individuals such as Ned Flanders would conceivably see their rates lowered as a result of their meticulous planning whereas a reckless unwed 16-year old male driving a crotch-rocket would probably see their rates increase.
Anyways, check out the BBC article I link to in the article as well as the discussion below the post. In addition, the mental exercise is turning this business model into practical use with private roads, yey to quixoticism.