Safety Issue Results in OBD UBI Recall

Usage-Based-Insurance

According to Seattle news station KIRO 7, American Family Insurance has an OBD problem.

Recently, the insurance company recalled a bevy of onboard diagnostic (OBD) devices named MySafetyValet, which it had distributed to customers across 17 states last spring. The problem? A few of the devices were interfering with vehicle electrical systems.

“In a small number of vehicles, the device may affect the electrical system and cause the vehicle to shut down during operation,” Sandra Spann told KIRO 7.

Not an unknown problem

The same malfunction happened with the Progressive equivalent, Snapshot: litigation was the result. And while there haven’t been any crashes yet linked to the MySafetyValet issue, American Family Insurance isn’t taking any chances.

It’s a textbook example of one of the more predictable dilemmas that OBDs can bring. Recalls are expensive. Malfunctions are unsafe. The fallout can be a mess.

In fact, OBDs have what it takes to compromise an entire pay-as-you-drive deployment, undermining the basic benefit-set that UBI offers. In an article titled “Ditch the Onboard Device, but Not the UBI Model,” ITA contributor Jake Diner named these devices the culprit behind a common string of roadblocks that organizations may run into when rolling out UBI.

He boiled it down to “the six insurmountable challenges” of OBDs:

1.  Costs x 3: The initial cost, fulfillment cost and replacement costs

2.  Vehicle compatibility and potential for electrical interference

3.  Inconvenience and waste: Drivers don’t want to crawl into the “no man’s zone” under the dash so many devices are left uninstalled

4.  Data problems: inaccuracy, ambiguity, conversion hiccups, ease of fraud

5.  A disconnect from user experience (not offering feedback, tracking transparency)

6.  Snail-paced rollout speed and a frightful lack of scalability

Anticipating the future of Usage Based Insurance

From where we stand, it’s pretty clear that the OBD is a bit of a dinosaur. There are sleeker and better usage based insurance solutions available now. Diner’s words:

“Smartphone UBI technology has now been tested and proven to overcome every one of the six OBD challenges listed above at a much lower cost and in a significantly shorter timeframe.”

While there certainly are some challenges to overcome in a successful usage based insurance implementation, bear in mind that OBD can make those challenges bigger and harder. Smartphones do the opposite: mitigating the difficulties, smoothing out the speed bumps. It’s the “lighter, more nimble” choice, Diner concludes.

Brush up on the advantages that a mobile approach facilitates, and find out what a smartphone-based UBI deployment can do for you: click here.


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