[AUTO] Trading Privacy for an Insurance Discount?

Category: Auto

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.

Car and Driver Monitoring devices

Progressive’s Snapshot program provides an average discount of $145/year a month to drivers who install a small device that plugs into the On-Board Diagnostics (OBD) port, which is typically located beneath the dashboard on the driver’s side of cars made in 1996 or later. There's also an app you can install on your phone. Both the app and the device measure a variety of factors related to your driving, including the times of day you drive, sudden changes in speed (hard brakes and rapid accelerations) and the amount you drive. It's a bit troubling to me that they also collect "location data... for underwriting purposes." Progressive says most customers will earn a discount, but if the monitoring indicates risky driving that increases the likelihood of being in an accident, you may pay a higher rate at renewal time. Progressive's privacy policy says the company "may share personally identifiable Snapshot data with third parties" including state departments of insurance, and "other service providers who are contractually required to maintain its confidentiality." Unless there's an unfortunate data breach. of course.

State Farm’s In-Drive driver monitoring system doesn't use an ODB plugin gadget, instead it relies a "Bluetooth beacon" that sticks to your windshield, and works in conjunction with your smartphone. It offers you an automatic 5% discount with the possibility to save even more on your auto insurance. State Farm says they collect mileage and, in some cases, basic driving characteristics to calculate your discount. The company says they "will only share policyholder information as required by law and as stated in the State Farm Privacy Policy. But the privacy policy allows them to share customer information "within our State Farm family of companies" and "with companies that perform marketing or other services for us." So basically, anyone.

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.

On the up side, Allstate has the least onerous privacy policy, promising that your driving data is viewable only to you, your Allstate agent and customer service representatives. Location data is collected, but is not available to employees servicing your policy.

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.

Will Verizon share all this data with marketers? The company pinky-swears that it won’t, of course. Verizon’s master privacy policy page gives details on what data is collected by the Hum device, and refers to the "Information we share" section which states that "Verizon does not sell, license or share information that individually identifies our customers... without the consent of the person whose information will be shared." Verizon has said that Hum customers will receive offers that may be of interest to them, i.e., discounted oil changes or tune-ups. But Verizon does not have to share your phone number with Jiffy Lube in order to make such offers.

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.

All of these “connected car” devices and services track your car’s location and other driving data constantly. That’s both a security feature and a privacy concern. I would carefully check the privacy policy of any such device before installing it. Even with all the assurances of "not passing on your sensitive information to a third party," can we really trust these companies any more than Facebook to resist the temptation to "monetize" your driving habits and history? And as I mentioned earlier, there are always data breaches.

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...

Ask Your Computer or Internet Question

  (Enter your question in the box above.)

It's Guaranteed to Make You Smarter...

AskBob Updates: Boost your Internet IQ & solve computer problems.
Get your FREE Subscription!


Check out other articles in this category:

Link to this article from your site or blog. Just copy and paste from this box:

This article was posted by on 3 Jul 2020

For Fun: Buy Bob a Snickers.

Prev Article:
Is Low Memory Bogging Down Your Computer?

The Top Twenty
Next Article:
Laptop Security 101 (and 102)

Most recent comments on "[AUTO] Trading Privacy for an Insurance Discount?"

(See all 30 comments for this article.)

Posted by:

03 Jul 2020

I used to have AllState, for years, they offered me one of those and I took it. But in MN, we get snow, if your ABS ever kicks in? That's counted as hard braking. I hated that thing. Next renewal period I moved to USAA and have never looked back, if you're a veteran, you won't find a better company or rates than they offer. Great service too - and no gadgets.

Posted by:

03 Jul 2020

It's hard enough to get insurance companies to pay out without adding to the loopholes. If some unsecured load on the vehicle in front of me decided to strike out on its own and I have to brake hard to avoid it why should that affect my insurance costs negatively? Given the circumstances of the hard braking (which the insurance company will never consider) I should be rewarded with being a good enough driver to avoid an accident rather than penalized for hard braking.
As for the terms, most I've bothered to read through state somewhere that the terms are subject to change without notice and it's my responsibility to stay up on the changes.
That's a hard pass for me.

Posted by:

03 Jul 2020

I probably drive at work at least fifty times the miles I drive socially - I'm a professional driver - so how will any insurer of my car know how badly I drive at work?
These things are known as' black boxes' in the UK, and compulsory for some younger or multi-claim drivers, or they don't get insurance, but for most of us they're an unnecessary and unwelcome intrusion.
There's even a bumper sticker about - "Slow driver - Black Box fitted!"

Posted by:

03 Jul 2020

If you turn off your smartphone, does it actually stop tracking your location, or do you have to remove the SIM card?

Posted by:

03 Jul 2020

Bob - Thanks for another great article

I am less worried about privacy. I am more concerned that an insurance carrier will deny coverage following an accident, based on data provided by the monitoring device. It wouldn't take much, just a determination that you are over the speed limit, and a clause in the policy requiring you to obey all traffic laws and regulations.

For a future article, I am intrigued by the FIXD device. Does it have value for the average car owner, just in helping maintain proper vehicle operation?

Posted by:

03 Jul 2020

A better option is a dash cam, so they can’t track you but you have evidence in case of accidents.

Posted by:

03 Jul 2020

I had one for 3 months an received a 20% discount due to my good driving. I was able to log in and see all data right after returning home. When I saw "hard braking" listed I started noting the time when I braked for lights that turned yellow and I was able to correlate. They taught me to go through lights that I never would have, before. When I brought it to their attention, they called "BS". !

I never would have permanently installed one but a 3 month period seemed OK.

Posted by:

03 Jul 2020

At one point in the '90s, Geico would penalize drivers who owned radar detectors.
A decade later, automotive 'black boxes' were introduced as EventDataRecorders (EDR).
By 2004, around 40 million (?) passenger vehicles were equipped w/EDRs.
Early last decade, Federal law for EDR (data collection) standardization stalled; while GM vehicles were mostly all equipped with OnStar.
The federal Driver Privacy Act of 2015 was enacted on December 4, 2015. It stated that the owner or lessee of a motor vehicle "is" the owner of the data collected by the EDR.
Late last month (that would be June 2020), a new law — the California Consumer Privacy Act, A.B. 375 — affords California residents an array of new rights, starting with the right to be informed about what kinds of personal data companies have collected and why it was collected, etc.
Today, with 82% of Americans owning smartphones; the bread-crumb trails that we leave behind are ginormous and CCPA is not even doing a good job playing catch-up!
Price of "FREE" has never been more expensive and costly.

Posted by:

Paul S
03 Jul 2020

I did not read all the comments but here is another thought. If you are involved in something requiring police involvement, suppose they notice a device in the OBDC port. They might need a court order but could use the data to charge you; certainly could influence the police report. This is a well known issue for dash cameras.We tend to only think of ways these devices benefit us, not necessarily how they might benefit someone else.

Posted by:

04 Jul 2020

That data is subject to a subpoena in a civil case by a party that wants proof of where (and when) you have been. Your insurer could be subpoenaed for the data (if relevant in the case). It could be in a divorce or an auto accident dispute, or it could be in any other action. How about the case you filed vs. your employer---don't you think they would love to have a record of where you have been during work hours?

If the government did this, all hell would break loose, especially with the Fox so-called "news" crowd. Why is it OK for us all to be a frog in the pot of heating corporate water instead?

Posted by:

Robert A.
04 Jul 2020

"Safe drivers save 40%!, safe drivers save 40%! That's the guy, that's totally him!"

Posted by:

04 Jul 2020

No way!

Posted by:

Kenneth Mitchell
04 Jul 2020

Gene; Why would a veteran ever buy insurance OTHER than USAA? They're a GREAT company.

Nautilusbaja: Agreed. I had an accident about 3 years ago; a woman ran the stop sign right in front of me, and I hit her. Her insurance company didn't want to pay - until I sent them a Youtube link to my dashboard camera recording. They paid up promptly after that.

Posted by:

04 Jul 2020

No, No and No. The hook right now is you save, but once most people have them or they can convince politicians to make them mandatory, I guarantee they will only be used to raise premiums. Have you ever heard of an insurance company loosing money?

Posted by:

04 Jul 2020

A few years ago I was always annoyed that I was paying more for my insurance than a friend.

I had full no claims bonus and drove carefully. He had numerous claims and drove like a lunatic. My car was a compact 1000cc and his a 2000cc. I drove less than 5000 miles a year and he traveled back and fall from Germany to Wales every two weeks.

I was self employed and disabled. He was an NCO in a Guards Regiment.

If I was still driving I would install one of these gadgets like a flash.

I can't really see any profit in anyone but my insurers knowing the details outlined.

They made it illegal in the UK to load disabled people's car insurance a few years ago. BUT the army discount would still apply as would the self-employed loading.

Posted by:

04 Jul 2020

Thanks for the info. I will look for an older model vehicle in the future. With out the black box or edr in a vehicles now. Everybody is spying on and want your personal info. No thanks to the insurance spy network.

Posted by:

04 Jul 2020

re FIXD device: for the $20 US I paid, it does have some value --as a toy during covid lockdown. It did report error codes but may not recognize specific error codes set by your car's manufacturer. Does not report live data. Be prepared for endless emails encouraging upgrade to the next level recommending service shops etc. I shelved it.

Posted by:

05 Jul 2020

The device is an option that must be requested with Safeco and gets a minimum discount of 5%. Users say that if you brake for a light, you will be dinged for excessive braking. To avoid this you must run the yellow/red. If you accelerate to merge or enter traffic, you will be dinged for excessive acceleration. If you drive after midnight you will be time dinged. Difficult for safe drivers to approach the maximum discount. GPS and other data deleted 60 days after the 90 day monitoring they say.

Posted by:

05 Jul 2020

The auto insurance agent talked up a potentially hefty discount, if we plugged their device into our vehicle, to get a short term sample, of our driving routine. There was no app involved and it sounded benign, so we agreed to using it. Overnight, our local drive of less than 10 miles, became an incredibly stressful ordeal.

Longterm, ongoing road construction (that had previously just been annoying), became a nightmare of challenges. Workers often stepped into traffic or drove their equipment out in front of vehicles with minimal warning. Now, just stepping on our brakes moderately, elicited a warning tone from the under-dash device. Pressing any harder, especially while trying to avoid hitting the rear of bad drivers, (usually slapping on their brakes unexpectedly while texting), caused a highly-disconcerting dual-tone. The same was true, when trying to stop suddenly, when encountering several notoriously short yellow lights - mostly at intersections with photo cameras, of course. Accelerating too quickly from stop signs and red lights, was sure to add "an event" to the log. More stress came in the form of the idiots suddenly deciding to turn in front of us, along with the ever-present pedestrians just waiting to step in front of any driver they think they can get a quick settlement from.

You can bet that checking the insurance site record and seeing it littered with numerous line-item "events", was very upsetting. We phoned the insurance company on several occasions, to contest unavoidable hard-braking situations and complained about the system being stacked against anyone navigating the perils of construction-zone mayhem. We asked why we incurred these negatives, when in fact, we had AVOIDED potential accidents? Of course each call, ended up with a different warm, calm voice, assuring us that those "common issues", were ALL factored into consideration, before determining our final rate. Saying that we were NOT HAPPY, would be a major understatement...

As the weeks dragged on, we found ourselves adapting and just as Will did, we too began speeding up to go through yellow lights. We also, became very quick to lean on the horn, at the slightest possibility of someone creating a situation, where we would have to touch the right or left pedal with anything more than prozac-induced lethargy. We re-routed ourselves through side streets and looked to avoid other vehicles, pedestrians, stop signs and intersections with fast-changing traffic lights. Our errands quickly started to take twice as long, so we decided to only drive every other day, to compensate for the additional stress.

The day came none too soon... NOT several weeks down the road, but SIX MONTHS LATER, when we received a box to return the device to the company. The following month, we received a massively underwhelming discount on our policy. In retrospect, had it been four times greater, we would NEVER AGAIN, allow ourselves to be put through that. The thing was VERY distracting, causing us to develop negative attitudes and habits. Our advice? Unless you want to be miserable the whole time, be strong. JUST SAY NO!

Posted by:

11 Jul 2020

We use Metromile. You get better than a discount - they charge you BY THE MILE so you really only pay for what you drive. Saves us 50% and there is a daily charge cap of 250 miles if you are on a road trip. And when we are out of town or in lockdown we pay only the minimum to cover Comprehensive. Also - you can find the location of your car on your app as well - great if it gets stolen. Privacy? Really?? When I am running drugs or visiting the mistress I unplug the ODB gadget :-)

There's more reader feedback... See all 30 comments for this article.

Post your Comments, Questions or Suggestions

*     *     (* = Required field)

    (Your email address will not be published)
(you may use HTML tags for style)

YES... spelling, punctuation, grammar and proper use of UPPER/lower case are important! Comments of a political nature are discouraged. Please limit your remarks to 3-4 paragraphs. If you want to see your comment posted, pay attention to these items.

All comments are reviewed, and may be edited or removed at the discretion of the moderator.

NOTE: Please, post comments on this article ONLY.
If you want to ask a question click here.

Free Tech Support -- Ask Bob Rankin
Subscribe to AskBobRankin Updates: Free Newsletter

Copyright © 2005 - Bob Rankin - All Rights Reserved
About Us     Privacy Policy     RSS/XML

Article information: AskBobRankin -- [AUTO] Trading Privacy for an Insurance Discount? (Posted: 3 Jul 2020)
Source: https://askbobrankin.com/auto_trading_privacy_for_an_insurance_discount.html
Copyright © 2005 - Bob Rankin - All Rights Reserved