‘Black Box’ Is Offered to Drivers

The lure of saving up to one-fourth off their premiums has hundreds of Texas drivers subjecting their behind-the-wheel habits to the scrutiny of their auto insurer via a “black box” installed in their cars.

Progressive Insurance Co., the nation’s fifth-largest auto insurer, has placed the devices in customers’ vehicles to measure how much they drive, when and where. The incentive is that if they drive well, their rates would be reduced.

But because such a device could be used in other ways--as a learning tool or to help determine fault in accidents--some privacy advocates are concerned that government agencies or businesses will seek access to the data.

The customers volunteered for the 14-month-old test program, which the suburban Cleveland company calls “Autograph.”

The company expects to benefit by getting new business from consumers who like the idea of having some control over their insurance rates and saving money, said Bob McMillan, Progressive’s director of consumer marketing.

The device’s patent describes a system of on-board sensors that could track whether a driver signals before turning, tailgates or stops so sharply that anti-lock brakes engage. McMillan says that once a month, the company’s computer calls the device in the car and uploads the information it has collected.

“There could be a high degree of interest from the government in getting access to this type of data. It could be used for litigation between private parties or by law enforcement. You can’t create a swimming pool of data without putting a fence around it,” said Deirdre Mulligan, spokeswoman for the Center for Democracy and Technology, a free speech and privacy group.

Progressive does not plan to release any of its driving records to marketers unless they are “consumer friendly and the customer agrees,” McMillan said.

The company won’t say if it is going to expand the test beyond Texas, but McMillan said there are no immediate plans to do so. “The product’s working right now. It’s easy to understand and we wouldn’t want to complicate it,” he said.

Rolling out a nationwide plan would be time-consuming because insurance regulations vary from state to state. Progressive started the program in Texas because it isn’t subject to state regulation there.

The black boxes are another in a long line of technology that lets consumers gain savings, safety or convenience in exchange for giving up information about where they travel or what they buy. Robert Ellis Smith, publisher of the monthly newsletter Privacy Journal, said he is concerned about people being observed more than ever.

Progressive makes customers aware of any privacy concerns. “When we talked to consumers, most had a privacy issue, but when we told them that data would be used to help them save money and used only in a specific way, they agreed,” McMillan said.