202101.06
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Should You Let Your Insurance Company Monitor Your Driving?

Many large auto insurers offer programs that will monitor you’re driving and give you a discount for safe driving. Additionally, there is one new insurance start-up that will require it. Is this discount worth the trade off in privacy?

What Is Involved?

The driving monitoring programs may use two different means to track your driving data. Some of the programs will use your smartphone’s GPS chip. Others will require a device to be plugged into the car’s OBD-II diagnostic port, and others gather data through General Motors’ OnStar telemetric system. State Farm Insurance requires a Bluetooth device to activate the app on your phone when the car door is opened.

The data recorded by the various apps can include miles driven, acceleration, speed, braking, in addition to use of your cellphone while driving. The companies vary only slightly in determining what makes a safe driver. While the proponents of this insurance program tend to only mention the potential savings, while privacy advocates call these apps, a “spy in your car.”

What Is the Discount?

Most of the driving monitoring programs provide a 10 percent discount against the price of a standard car insurance policy and reward good driving with additional discounts. For example, at State Farm, the average discount is between 10 and 15 percent, but the maximum discount is 50 percent, while at Nationwide the average discount of 21 percent. Allstate reports that 50 to 60 percent of all drivers enrolled in its program earn benefits beyond the initial discount. The insurance start up mentioned earlier, Root Insurance, has policies work somewhat differently. All drivers with a Root policy are required to be monitored. Root sets a customer’s rate after an app records their driving data over a 30-day trial period. However, approximately 15 percent of drivers who complete the 30-day trial are denied coverage. The maximum discount at Root is 52 percent.

What About Privacy?

There are some privacy considerations to take into account before joining a driving monitoring program with your car insurer. Most of the programs report your vehicle location, so your insurer will know where you are. Some people may find this disturbing, however any American with a smartphone has most likely sacrificed this type of privacy already. These programs are banned in California, whose insurance department bars the use of individual driving data for setting rates.

Is It Worth It?

Drivers who engage in the following activities while driving may lose their initial discount and may even see their rates raised:

  • Excessive speeding
  • Use of cellphone while driving
  • Hard braking
  • Excessive mileage

However, for many drivers, this usage-based insurance is less expensive than a conventional policy, and for cautious drivers who do not drive that often, it can be a great deal.

By tying a financial benefit to safe driving, these insurance programs will hopefully help reduce the amount of automobile accidents. If you have any questions about car insurance or if you have been injured in an auto accident, please contact the Law Offices of David I. Pankin, P.C. at 888-529-9600 or by replying to this email. We have been helping car accident victims get the compensation they deserve for over 25 years. The consultation is always free, and we will provide excellent “customer” service.

Here are links to the various monitoring programs:

Allstate Drive Wise

Liberty Mutual Right Track

Geico DVE Easy

Nationwide Smart Ride

And here is a link to the car insurance start up:

https://www.joinroot.com/