Insurance

Are your phone apps collecting data on how you brake or speed?

  • June 17, 2024
  • 3 min read
Are your phone apps collecting data on how you brake or speed?

Certain smartphone apps are collecting data about drivers’ habits and sending it to auto insurers to help determine insurance rates. This practice is sometimes done without the driver’s knowledge or consent. According to a recent report in The New York Times, popular apps such as Life360, MyRadar, and Gas Buddy are providing user data to an Allstate-owned company called Arity.

These apps use telematics to gather sensor and motion data from smartphones, which is then analyzed by Arity to create a “driving score” that assesses behavior behind the wheel, including distracted driving, speeding, and sudden braking. Insurance companies purchase these scores, but many people are unaware that they are being tracked in this way.

The companies collecting this data claim that consumers have consented to sharing this information and can opt-out if they choose to do so. For example, GasBuddy allows users to enable a feature that rates the fuel efficiency of their drives, which is powered by Arity. Users must agree to Arity’s privacy statement before opting into this feature.

However, the report highlights that the consent process may not always be clear to users. For example, on GasBuddy, the agreement to share information with Arity is in small gray font under a big red button labeled “Join Drives.” The disclosure does not fully explain what Arity does, and the company sells access to driving scores to auto insurance companies. Allstate’s website states that insurance companies can request an individual’s driving score, which is provided instantly.

Not all insurers use Arity’s driving data, as some, like GEICO and USAA, only collect driving behavior data from individuals who have downloaded a specific smartphone app to track their driving habits.

The use of driving data to determine insurance rates is seen as a potential way to more accurately predict risk for individual drivers and create a fairer system for setting rates. This is especially important as current auto insurance practices may unfairly discriminate against certain individuals based on socioeconomic factors like credit score, job status, education level, and marital status.

Micheal DeLong of the Consumer Federation of America points out that people with poor credit scores often pay more for auto insurance, even if they have a clean driving record. Telematics, he believes, holds promise for consumers and could lead to a more equitable pricing system for auto insurance.

The article in The New York Times, titled “Is Your Driving Being Secretly Scored?” shares several anecdotal stories about this practice. It suggests that while telematics may offer benefits for consumers, there are also concerns about privacy and transparency in how driving data is collected and used by insurance companies.

Overall, the use of driving data to set insurance rates is a topic of ongoing debate, with proponents arguing for its potential to create a fairer system, while critics raise concerns about privacy and discrimination.

About Author

SUV Bazar

Leave a Reply

Your email address will not be published. Required fields are marked *