Good Idea Friday - One real world idea whose time I think has come

Today: May 5th, 2013.

Idea: Instead of providing insurance rebate, provide auto credit for good driving.

Most insurance companies have deep tie-ins with automotive companies. They are integrated into the sales cycle, and provide no-cash facility for service. In the event that you make no claim for a year, they are willing to renew your insurance for a discount. All is good.

However, why not turn this around with a bit of ingenuity? Instead of providing a discount on my insurance payment, offer a slightly larger credit with the automotive dealership. This credit should be applicable to spares, service charges, and even labor costs. It wouldn't be too difficult to bring this in within the existing system and I think it will influence a couple of things:

1. The insurance discount is often viewed as savings, and not a reward - people don't necessarily work for it. With this system, I think people will work to earn that reward at the end of the year - hopefully, creating safer drivers.  
2. With a credit available with the auto companies, their revenues will go up. The delta increase in the reward should easily be covered by the raise in the revenue.
3. Now that the drivers have credit, they will be free to spend that on the upkeep of the car - maybe pay for a service, or upgrade their audio system, or a touch up job to get rid of all those scratches, or a broken taillight. The driver feels more 'rewarded'; happier now that their automobile is 'fixed' or 'upgraded'
4. Some of that money will go into getting a service for the car - maybe... just maybe creating a safer car on the road?

Here is how I envision it to work:

• Level 1: You start with X credits at the beginning of an insurance period. Every accident, traffic violation, and 'irresponsible insurance behavior' gets points out of that X credits. At the end of the insurance period, you get credit at the dealership of your choice.
• Level 2: As you stay with the insurance company for long, you will also be eligible for additional points - so loyalty with the insurance company is built over time.
• Level 3: If you manage to empty the points over an insurance period, you are moved into a higher-risk category. This means additional premium. 
• Level 4: Since there are multiple service centers with whom you can choose to have credit, they can extend discounts (and additional credit) to build loyalty with customer. Also, since the customer might get most of their service 'free' they might be able to sell more of the 'premium service' options (engine flush, interior cleaning services etc.)

So... This is my idea for this Friday - what do you think? :)

Let me know.