Auto Insurance Telematics Discounts – Consumer Reports

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Insurers who use telematics tend to gather a lot more information than is needed to determine discounts. Even if a business doesn’t use speed or phone usage in their calculations, for example, they can still track and record these behaviors. Businesses also typically need 24/7 access to your smartphone’s location to collect telematics data.

Sometimes this additional information is used to give drivers information about risky habits without changing their discounts. That’s why an Allstate telematics customer might see red flags in the Drivewise app if they were using their phone while driving, even though the program doesn’t currently provide distracted driving discounts.

Other times, the use of the information is unclear. Liberty Mutual, for example, says it can collect data, including cell phone type, ignition status, vehicle diagnostics, and fuel consumption, even though that information isn’t in the price. or a user’s discounts.

Some consumer advocates say insurers shouldn’t be collecting data they don’t need to calculate premium levels. “They collect so much,” says Heller, the Consumer Federation of America’s insurance expert. “What you get is this massive dataset that’s not as straightforward as you are told upstream.”

Some insurers may also use the information for purposes you may not have considered. Almost all of the companies we studied, for example, reserve the right to use telematics data to analyze insurance claims, meaning that information about the movements of your car in the seconds before an accident could have important ramifications.

Suppose you are run over by a drunk driver, but your telematics data shows that you are accelerating at this point. Your insurer could use this information to reduce your coverage or deny your claim altogether, warns Bob Hunter, former Texas insurance commissioner and director of insurance at the Consumer Federation of America. “A lot of insurance companies like to find an angle to deny claims, and telematics could be an angle,” says Hunter.

Friedlander, spokesperson for the III, called the claim that insurers could use telematics data to deny auto claims “unfounded.”

Several companies also claim that they can use telematics data for targeted marketing. Progressive states in its Snapshot privacy policy that it may use personally identifiable information collected from telematics customers to market its own products. Farmers, Liberty Mutual, and Nationwide allow the use of telematics data for marketing purposes in their written policies, but told CR they do not currently use telematics data for this purpose. A Nationwide spokesperson said the policy is there “to preserve the ability of the company to do so in the future.”

“Businesses shouldn’t use telematics data for marketing purposes,” says Justin Brookman, CR’s advocacy director for consumer privacy and technology. “Consumers share their data in order to obtain insurance rates based on their personal habits; they don’t expect companies to reuse that data to try to market products to them.

In addition, the data collected by insurers has an extremely long lifespan. Half of the insurers we surveyed say they can keep the information they get from you, which can include detailed maps of your trips, when you took them and how you drove, for as long as they can. wish. Two companies said they typically keep data for 10 years; others referred us to their own records retention policies, but did not want to reveal those policies. Geico’s policy is unclear, and the company has not responded to questions from CR. (Google, by comparison, deletes location history data after 18 months by default.)

“Most of these companies are still building their databases,” says Friedlander. “They’re capturing all the data they can at this point, and that’s why you get responses like, ‘Yes, we keep that data indefinitely. “”

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