Until recently, insurance companies have based their rates on a person's driving record.

But increasingly, companies are keeping an even closer eye on their clients by installing a small wireless device behind the wheel that tracks driving habits.

Allstate Insurance is the first to roll out the program here in Alberta, and the company says customers with safe driving habits could receive up to a 30 per cent discount on their insurance as a result.

"It's very small, fits in your hand, and then you set it and forget it," explained Lisa McWatt, the director of branding for Allstate, about the device, called Drivewise.

The device doesn't monitor a driver's location. Instead, it tracks excessive speed, hard braking, the time of day a person drives and how long they drive for.

Discounted driving

Here's how it works: If you drive safely over a six-month period, you'll get a discount on your insurance. An algorithm uses the speed, braking, time and length of driving to determine how much of a discount the driver should get.

"Over a six-month period, sure, you're going to have to hard brake to avoid somebody stopping too fast in front of you," McWatt said. "So if it's happening once or twice, that's part of driving. But what we're looking for over a six-month period is the frequency of that happening. The safer drivers are leaving more space and more time."

Same goes for excess speeding, she added.

Have a bad driving record? Don't worry.

"We can't charge you more," McWatt said. "It's only a discount base. The worst case is you don't get a discount."

'Not like Big Brother'

Allstate isn't tracking their customer's every move, McWatt said.

"It's a telematic device, it's a small device, and our customers will opt in," she said. "It's not Big Brother, we're not watching you."

If a driver gets into an accident, McWatt said the insurance company doesn't use the information gathered for claims.

However, if police subpoena Allstate, the company will be required to hand over the data it's collected.

Tracking and teaching opportunities

The device doesn't track who is driving the vehicle, which means if you have multiple people using the same car — a young, inexperienced driver, for example — you might want to think carefully about installing the device.

But McWatt said families could turn this into a teaching opportunity.

"The good thing, from a driver perspective, is you can actually go online and it will give you reports on the safe driving habits," she said. "If you know when the driver is driving, you can go on and watch the report and then you can have those conversations."

McWatt said she doesn't expect devices like this to become mandatory anytime soon.

"I think it's too early to tell," she said. "It's really about the consumer and if people start using it and valuing it and we're starting to see improvements, then we could look at it, but it's a long way off."

With files from the Calgary Eyeopener