There already are obvious financial incentives to obey the speed limit: Speeding can result in costly tickets, as well as even more costly auto insurance surcharges. But what if the incentive system was reversed and drivers were paid a cash bonus for staying under the speed limit?
The National Highway Traffic Safety Administration (NHTSA) wanted to know what would happen with just such a program. The threat of speeding tickets works to limited effect because, most of the time, drivers don’t get caught. Instead, would drivers slow down for the equivalent of a few bucks per day?
To find out, the NHTSA recently had 50 different drivers cruise around for one week in cars equipped with GPS trackers that constantly monitored their vehicle’s speed. Any driver that stayed within the posted speed limit for the entire week was given $25.
If, on the other hand, a driver exceeded the speed limit by 5 to 8 mph, 3¢ was knocked off the total. And if a driver went 9 mph or more above the speed limit, the penalty doubled to 6¢. Still, those amounts don’t seem like much. Would the threat of losing some pennies here and there really make drivers change their behavior and stay dutifully under the speed limit?
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For the most part, the answer is yes, according to test organizers. Per an NPR report about the experiment:
“We found that the incentive system was incredibly effective in getting drivers to reduce their speeding,” says Ian Reagan, a traffic safety researcher at NHTSA. “Egregious speed limit violations were almost eliminated — that’s driving nine or more [miles per hour] over the speed limit.”
OK, so what does this mean for drivers who weren’t part of the test and didn’t get the chance to earn $25 by not putting the pedal to the metal? Down the line, information like this may be used by auto insurers to change the way drivers are charged for coverage.
The Wall Street Journal recently reported that insurers are already “accelerating efforts to tap into the systems that enable a car to communicate with satellites and mobile data networks, and use information about how you drive to set your rates.” This concept, known as “pay-as-you-drive” insurance, essentially rewards safe drivers with cheaper rates, and, correspondingly, charges higher premiums to drivers who speed, accelerate hard, and make sudden stops. Devices installed in cars also measure overall distance traveled and the times of day one hits the road. All of these factors play roles in how risky (or not) your driving habits are. Consequently, they are increasingly impacting premiums being charged by insurers.
The researchers in charge of the NHTSA study came to the conclusion that a cash reward system could have the “potential to benefit traffic safety by reducing the incidence of driving faster than the posted limit, which should lead to a reduction in speed-related crashes.” Drivers who speed and crash less are obviously desirable for insurers, and that’s why researchers are suggesting the following for those who consistently stay at or under the speed limit:
Insurers provide incentive-based discounts on premiums. Combining this technology with such a discount program may improve traffic safety significantly.