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Practical applications of vehicle telematics

This suggests that even if adverse selection is not observed by the econometrician (as found by, among others, Saito (2006) and Dionne, Gouriéroux, and Vanasse (2001)), the pooling of consumers may be undone by an insurer with superior information created by EDRs. EDR technology is patentable and it is likely that this patented technology may limit the number of insurers who can access EDR-generated information regarding consumer risk type.3 Even if the EDR-generated information is shared among firms, asymmetric information may already exist among insurers arising from different experiences.4 EDR’s are already used in trucking and fleet management to measure the quality of driver behavior for individual drivers. The technology already exists to monitor the usage of vehicles wirelessly by both Wi-Fi technology and satellite. It is likely that this technology is already used by commercial insurers to price fleet and commercial automobile insurance. Our results contrast