[AUTO] Trading Privacy for an Insurance Discount?
Old-school car insurers are using new-fangled “connected car” technology to save drivers up to 30% on their auto insurance premiums, while making driving safer and more fun. Sounds good, right? But the devil is in the details. Read on for the scoop...
Gadgets That Monitor Your Driving
I recently switched auto insurance companies, and a few days later, a little "SmartRide" gadget arrived in the mail, with instructions to plug it into the ODB port under the dashboard. I wasn't expecting this, as it was not mentioned when I spoke to the agent. When I called, the agent told me that I could get a discount on my new policy if I plugged it into my car. Major auto insurers, including Progressive, StateFarm, and Allstate, are asking drivers to allow sensors to be installed in their cars that track drivers’ activities. The sensors track when and how far people drive, how often they slam on the brakes, if they speed excessively, and other driving data points.
This data lets insurers discover exactly who the safer drivers are, the ones less likely to file claims. In the long term, insurers hope to use such data to tailor premiums more precisely to individual drivers. But to get the data, insurers need drivers’ consent to install the sensors. Given what I know about digital privacy, and how large corporations store, share, and secure data, I politely declined.
Here's some information to help you figure out if using one of these devices will result in lower (or possibly higher) auto insurance rates, and other things you should know before you make a decision about using one.
If you use Allstate’s Drivewise gadget, you can save 10% off your auto policy when you sign up, and "up to 28%" off your policy every six months for your everyday safe driving. (Not sure how they calculate the "up to" but it's probably based on how well do regarding these criteria: Safe Speeds (below 80 mph), Safe Hours (limit late-night trips), Safe Stops (limit hard braking), and Low Mileage (skip those long trips). Allstate wants to give customers personalized driving feedback to make them safer drivers, and help young drivers develop good driving habits. That may be true, but it also sounds to me that if you work nights, enjoy road trips, or live in areas where wildlife often cross the road, you'll be penalized, even if you're otherwise an excellent driver.
What Is Tracked and Reported?
All three insurers provide a website and mobile apps through which drivers can get feedback on their driving habits and see where improvements could lead to bigger rewards.
So how many drivers taking the bait? About one-quarter of new Progressive customers and one-third of Allstate customers are consenting to be monitored in exchange for discounts or rewards, reports Fortune magazine. Some of the holdouts may be terrible drivers, but many (myself included) have concerns about privacy. I already have a healthy disdain for the way large companies treat the security of the data they collect, and a nagging suspicion that they're not fully disclosing everything they collect. And despite the best intentions of these corporations, there may be flaws in the mobile apps they provide, which could allow third parties to spy on your driving habits. Those third parties might include your internet service provider, your phone manufacturer, and sketchy developers whose apps are installed on your phone.
So far, most insurers only track how and how far you drive, not where you go and where you park. But such location data is surely of great interest to an insurer. If you habitually drive in high-accident areas or leave your car parked outdoors in high-crime areas, you probably pose a higher risk of loss to an insurer. Many drivers are concerned that location data might find its way into the wrong hands, and affect their rates negatively.
Other Car Monitoring Gadgets
Verizon’s Hum system, is a 4G LTE connected car solution aimed at car owners with "dumb cars" -- vehicles that don't have OnStar or in-dash displays. Hum costs $15/month, and compiles data on fuel economy, battery charge level, transmission coolant temperature, and engine error codes. It relays that data to Verizon, and a smartphone app notifies you of any problems that need attention. The app explains what error codes mean, and even provides repair cost estimates. If necessary, Hum will dial an ASE-certified mechanic in a Verizon call center to talk you through complex problems. Hum can also contact emergency services, and track your car via GPS if it’s stolen (or just misplaced in a parking lot). Location data, too, is transmitted to Verizon.
FIXD is a $59 sensor device that plugs into your ODB port and claims to give you "a plain English readout of over 7,000 codes that your check engine light gives you." FIXD says you can use this information to avoid getting ripped off at the auto repair shop. The FIXD device communicates with an app on your iPhone or Android smartphone, and does not transmit your driving data to third parties.
So how much privacy do drivers really have? Your mobile phone (even a plain old flip phone) has both a wireless radio and GPS that can be used by your mobile service provider to locate you or track your movements. Smartphones keep tabs on your location, and store that history in your Apple, Google or Microsoft account. If you have an E-Z Pass device, your location and speed can be determined by the state or agency that provides it. Maybe privacy really is history.
Your thoughts on this topic are welcome. Do you allow your auto insurance company to monitor your driving? Post your comment or question below...
This article was posted by Bob Rankin on 3 Jul 2020
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Article information: AskBobRankin -- [AUTO] Trading Privacy for an Insurance Discount? (Posted: 3 Jul 2020)
Copyright © 2005 - Bob Rankin - All Rights Reserved