It’s common knowledge that everyone has a credit score, but did you know that you could also have a driver score? Yes, you read that right! Driver scores are becoming more prevalent and are gaining importance in the world of driving.
Your driving habits determine your safety score, which takes into account factors such as braking frequency, speeding, phone usage, and night driving.
Obtaining information about your driving score can be a challenge since it is not as readily available as your credit score. However, it is noteworthy that auto insurance companies have access to this information, and it could potentially impact the rate you pay for coverage.
Auto insurance companies have been promoting usage-based insurance plans for the last 20 years, which monitor an individual’s driving habits to provide more accurate rates. However, these plans have not been widely adopted due to concerns around privacy among consumers.
Insurance companies have found a new approach to obtain data on how people drive: by acquiring it from automakers or from apps that drivers already have on their phones. According to experts, many individuals are unaware that the insurance industry has the capability to track their driving habits through these means.
Dozens of lawsuits were filed by customers and General Motors ended its contract with data broker LexisNexis after The New York Times exposed the carmaker’s practice of sharing driving behavior. However, it’s important to note that data is still being collected from other automakers and apps.
Telematics, also known as driving behavior analysis in the insurance industry, has the potential to benefit consumers by providing personalized rates that are equitable. Additionally, if individuals are charged more for their risky driving, it could motivate them to be more cautious on the roads, resulting in safer driving conditions. However, this can only occur if drivers are informed that their behavior is being monitored.
As per the data collecting and selling firms, consumers give their consent to share their data with the insurance sector. However, the unclear process of obtaining consent can lead to individuals not fully comprehending what they are agreeing to.
Michael DeLong from the nonprofit Consumer Federation of America stated that the notion of an insurance company acting as a co-pilot is unappealing to the majority of consumers.
Revolutionizing the Way We Use Our Phones: Smartphone Apps
Smartphone apps have completely transformed the way we use our phones. With the click of a button, we can access a wealth of information and services right at our fingertips. From social media to banking to fitness tracking, there seems to be an app for just about everything. With over 2 million apps available for download on the App Store and Google Play, the possibilities are limitless. Whether you’re looking to stay organized, entertained, or informed, there’s an app out there for you. So next time you reach for your phone, remember the power of the tiny icons on your home screen.
At first glance, it may not be obvious that some smartphone apps are collecting driver data. For instance, Life360 is a popular app used by parents to keep track of their children, while MyRadar provides weather forecasts and GasBuddy helps people save on fuel costs. However, these seemingly unrelated apps are also collecting data on driver behavior, which can be sold to third-party companies and used for targeted advertising or other purposes. So, it’s important to be aware of the information that these apps are collecting and how it might be used.
These apps offer optional driving analysis features that use sensor and motion data from the phone. Enabling these features allows users to receive notifications in case of a family member’s crash or to receive suggestions on a more fuel-efficient route to work. However, the analytics company, Arity, which was established by Allstate in 2016, provides these features and pays for data access. What is not explicitly stated is that Arity also evaluates the user’s driving risk for insurance purposes.
GasBuddy users have the option to utilize a feature that evaluates the fuel efficiency of their drives. This specific feature is “powered by Arity,” according to Brandon Logsdon, a representative for the company. Prior to opting in to the Drives function, users must first agree to Arity’s Privacy Statement.
Underneath a striking red button labeled “Join Drives,” there is a small disclosure in gray font. It states that by clicking the button, you will be sharing “certain information” with Arity and consenting to their privacy statement, which is linked. However, the text fails to clarify what Arity’s purpose or function is.
Allstate’s website states that the company provides access to the driving scores of millions of individuals, which can be instantly delivered upon request. This enables auto insurance companies to obtain an individual’s driving score.
According to a recent blog post by Arity, the scores evaluate drivers’ performance while driving, taking into account factors such as sudden braking, speeding, and phone usage. The scores are divided into 10 different risk categories, and insurance marketers can utilize them to target potential customers.
In the previous month, Kathleen Lomax, a mother from New Jersey, had subscribed to Life360 for a fee of $100 per year to track her husband and twin 18-year-old daughters. However, she became concerned about the possible sale of their driving data and decided to reach out to the company for clarification. To her surprise, an automated AI-generated response informed her that Life360 did indeed share driving behavior data with Arity.
Lomax, who canceled her subscription, stated that consenting to such actions is impossible for anyone who understands the gravity of their actions.
According to a statement provided by a Life360 spokesperson via email, no personally identifiable driving information for Lomax and her family was ever disclosed to any insurance company. The spokesperson further clarified that consent from a Life360 member is mandatory and that Arity is obligated to identify Life360 as the source of data whenever it is used to generate insurance quotes. GasBuddy, on the other hand, stated that Arity offers personalized offerings and improved services to users who opt-in. Despite multiple requests for comment, MyRadar did not provide any statement regarding the matter.
According to Stacy Silver, spokesperson for Arity, when someone looks for auto insurance and uses apps that collect driving data, the insurer must obtain consent to access the information. However, the extent of the request for consent is uncertain. CSAA, a regional insurer for AAA that utilizes Arity’s product in some states, stated that consumers are notified of the consent to use smartphone data when they are informed that “we may collect third party data and reports.” This language is commonly used by insurers to view credit reports, and many consumers may skim past it without fully comprehending its significance.
Under the Fair Credit Reporting Act, companies that produce consumer reports must furnish them upon request. However, Arity, with its vast database of millions of individuals’ driving data, does not make individual driving reports readily available. Instead, the company only provides a report to a driver if an insurance company requests it as part of a quote.
Only a select few insurers utilize Arity’s driving data. According to representatives from GEICO and USAA, they solely collect driving behavior data from individuals who have downloaded a specialized mobile application that tracks their driving habits.
According to Allstate, they will be giving consumers the option to receive a personalized rate based on their driving history, which will be collected by Arity. This option will be made available to customers in the near future.
Introducing a fresh measurement
As the world becomes more data-driven, new metrics are continuously being developed to measure various aspects of life. One such metric is the Gross National Happiness (GNH) index, which measures the quality of life in a country based on non-economic factors such as mental and physical well-being, community vitality, and environmental health. This index was first developed in Bhutan in the 1970s and has since been adopted by other countries such as Scotland and New Zealand.
According to Dale Porfilio, a representative of the Insurance Information Institute, determining auto insurance pricing is a complex process. It involves taking into account various factors including credit history, gender, marital status, age, as well as the type of car you drive and your location.
Porfilio emphasized the challenge of predicting the future, acknowledging that it is impossible to know for certain. He maintained that insurance pricing should align with policy risk, as it is a fundamental principle of the industry.
According to him, the insurance sector has abundant data at its disposal. He believes that telematics is one of the latest variables that can be utilized as a tool to align the price of insurance with the level of risk. Telematics can be leveraged when drivers grant access to it.
According to Porfilio, one of the reasons why usage-based car insurance is gaining popularity is because traffic citation data, which insurers have traditionally used to assess risk, is no longer as dependable. While driving has become riskier, police officers are issuing fewer tickets, which some attribute to a reduction in law enforcement activities after the pandemic and the widespread protests that followed George Floyd’s death.
Telematics has a significant advantage in predicting risk for individual drivers and offering a more equitable method of determining rates. According to an Arity promotional document, insurance companies typically charge higher premiums for 24-year-old men residing in busy urban areas compared to 50-year-old women living in the suburbs. However, this approach fails to consider whether the young man is a careful driver who seldom uses his vehicle, while the middle-aged woman is an aggressive driver who frequently logs many miles on the road.
According to InsurTech Consulting’s founder, Alan Demers, a driving score may become a common feature for everyone in the future. He also suggested that despite most people believing that they are good drivers, they might actually prefer having a driving score.
Demers emphasized the importance of being judged based on one’s own merit, rather than being compared to others. “Don’t evaluate me by looking at others,” she stated. “Evaluate me based on who I am.”
Consumer advocates are in agreement with the industry regarding this aspect.
According to the Consumer Federation of America’s DeLong, auto insurance is plagued by unjust discrimination. Insurance providers often take into account socioeconomic factors such as credit score, occupation, education level, and marital status. It’s unfair that these factors are considered when determining insurance rates.
According to DeLong’s research, individuals with low credit scores are required to pay significantly higher premiums for auto insurance, regardless of their clean driving records.
According to him, telematics holds significant potential for consumers and can be an effective means to determine auto insurance rates. However, he also expressed apprehension about insurance companies potentially crossing the line and taking an invasive approach or misusing data, leading to discrimination in new forms.
Tracking the time of day someone drives can affect their driving score. Driving at night for extended periods can negatively impact a person’s score due to decreased visibility and an increased likelihood of encountering tired or intoxicated drivers. However, this approach can be unfair to individuals who work the night shift, particularly those in lower-income positions like janitors.
According to DeLong, it is not acceptable for consumers to be enrolled in these programs without their knowledge or consent.
According to Chi Chi Wu, a lawyer with the National Consumer Law Center, there is an additional concern to consider. The law mandates that consumer reporting agencies, including Arity, must take measures to guarantee the accuracy of their data.
According to her, it is important for the app to have protocols in place to distinguish whether it is collecting data about the driver or the passenger.
According to Silver, who is Arity’s spokesperson, the company utilizes sophisticated technology to differentiate between a person who is operating a vehicle and someone who is merely a passenger.
Surprise Surveillance
In Texas, a tech executive named Rob Leathern received an email from Toyota last year that appeared to be harmless. The email stated, “Good news, Robert! You’ve been identified by Toyota Insurance as a safe driver.”
Progressive sent Leathern an email with the promise of “big savings” and encouraged him to obtain a quote for his 2023 Sequoia SUV. Upon clicking the provided link, he was directed to a Toyota Insurance website where he was prompted to enter his ZIP code and “get a quote.” Should he proceed with the quote, the website would grant permission to Connected Analytic Services to share his contact information, vehicle identification number, and select driving data with Progressive.
Leathern was curious about the information being gathered about him. He spent a month making phone calls, sending emails, and making data privacy requests to Toyota and Connected Analytic Services, which was revealed to be an insurance data broker. In January, Connected Analytic Services finally sent him a report detailing the last six months of driving his SUV. Corey Proffitt, a Toyota representative, clarified that Connected Analytic Services is an anonymous Toyota affiliate that shares location and driving data with partner insurers. Additionally, customers can control what information is shared about them through the data privacy portal on the Toyota/Lexus app.
The report was divided into two parts, with the first one being a summary of Leathern’s driving. It included details such as his mileage, the number of times his car’s safety systems were engaged, and the instances where he braked and accelerated at a rate that insurers consider to be harder than necessary for defensive driving.
Leathern had meticulously recorded his every offending event in a Microsoft Excel file, complete with time-stamped lists and the precise latitude and longitude of the location where they occurred. The speeding tab alone contained over 200 second-by-second entries, documenting every instance in which he exceeded 85 mph while driving.
He expressed his surprise, saying, “I had no prior knowledge of them collecting this information, let alone utilizing it in this manner.”
According to Ronald Davis, Progressive’s spokesperson, the insurer only obtained driving data from car manufacturers with the explicit consent of customers who agreed to use that data to determine their rate.
During an investor presentation in 2022, Progressive revealed that it was enhancing its pricing accuracy by utilizing data on people’s driving habits. As part of the presentation, the company showcased a personalized rate screen that a potential customer would encounter while obtaining a quote. The screen featured a prompt that read, “Get a personalized rate based on your driving behavior,” along with a simple yes-or-no option for customers to consent to using their existing driving data.
According to Davis, Progressive makes it a point to notify qualifying customers about the availability of driving data from their vehicle manufacturer when providing a quote for a new policy. The company then asks if they would like to utilize that data in calculating their rate. Davis shared that 70% of those who opted to share their driving behavior data were able to receive a discount.
Be Wary, Drivers
In April, the Connecticut insurance regulator cautioned consumers about the potential for new cars to monitor driving behavior, which could impact insurance rates.
According to George Bradner, an assistant deputy commissioner at the Connecticut Insurance Department, they are in favor of the utilization of telematics and the chance for individuals to be evaluated based on their driving performance.
According to him, the warning was issued by his agency as a result of many consumers being unaware of how their data is being used. He emphasized the need for insurance companies to be open and upfront about the information they use to determine people’s rates.
According to him, it is essential for consumers to be more cautious about safeguarding their privacy.
How You Can Take Action
To make a difference, there are several things you can do. One of them is to educate yourself and others about the issue at hand. You can read articles, books, and watch documentaries to learn more about the topic and increase your awareness. You can also share what you learn with others and encourage them to take action as well.
Another way to get involved is to volunteer your time and resources. Many organizations and charities are dedicated to making a positive impact, and they rely on volunteers to help them achieve their goals. You can donate your time, skills, or money to these causes and make a difference in people’s lives.
Furthermore, you can also make changes in your own life to reduce your impact on the issue. For example, if the issue is climate change, you can reduce your carbon footprint by using public transportation, eating less meat, and conserving energy at home. Small changes can add up to make a big impact.
In conclusion, there are many ways you can take action to make a difference. By educating yourself and others, volunteering, and making changes in your own life, you can contribute to positive change and help make the world a better place.
Make sure to review the privacy settings on both your car’s dashboard system and any related smartphone apps to ensure that your personal information is being protected.
Begin by checking if the app is designed to connect to your car or provide feedback on your driving. This will give you a good starting point.
Some applications, like Life360 and MyRadar, offer users the ability to opt-out of having their personal information sold by selecting the “Do not sell my personal information” option.
Google Maps and Waze are two apps that users can trust without any concerns about their privacy. According to Google, the owner of both apps, they do not share any driving data that could be linked to individuals with third parties. This means that users can enjoy the benefits of these apps, such as real-time traffic updates and route suggestions, without compromising their personal data.
