As technology advances, our lives become increasingly interconnected with data. While most people are familiar with credit scores, another less well-known but equally influential metric is emerging: the driving score. This score, which can significantly impact your auto insurance premiums, is derived from data collected on your driving habits. From how often you brake hard to how frequently you speed, these insights are used to evaluate your risk on the road.
What is a Driving Score?
A driving score is a metric based on your driving behaviors. Factors such as speeding, harsh braking, phone usage while driving, and driving during late hours contribute to this score. This data can be gathered by your vehicle’s onboard systems or smartphone apps and then sold to data brokers who collaborate with insurance companies.
The Implications for Auto Insurance
Insurance companies traditionally rely on factors like credit scores, marital status, and educational background to determine premiums. However, these metrics often do not accurately reflect an individual’s driving safety. By focusing on actual driving behaviors, insurers aim to create a fairer system. For instance, if you are a cautious driver but have a low credit score, you might benefit from a lower insurance premium based on your driving score instead.
How is the Data Collected?
Several apps and in-car systems collect driving data, often without users’ explicit awareness. Popular apps like Life360, MyRadar, and GasBuddy offer driving analysis features as add-ons. These features track various driving habits and relay the information to data brokers, like Arity, who then market the data to insurers.
Vehicles themselves are also data collectors. Modern cars with internet connectivity can send detailed driving records back to automakers, who may share this information with third parties. This was the case for Rob Leathern, a tech executive who discovered that Toyota had collected extensive driving data on him without his explicit knowledge.
Potential Benefits and Concerns
Pros:
- Safer Roads: Studies suggest that awareness of being monitored can encourage safer driving habits. Usage-based insurance plans have shown that drivers who know their behavior is being tracked tend to drive more cautiously.
- Fairer Premiums: Using driving scores to determine insurance rates can result in fairer pricing. Good drivers are rewarded with lower premiums, regardless of their credit score or other unrelated factors.
Cons:
- Privacy Issues: Many drivers are unaware of the extent of data collection. Consent for data collection is often buried in fine print, making it easy to overlook, so ask questions and pay attention.
- Discrimination Risks: Certain driving behaviors penalized by these scores may unfairly impact specific groups. For example, driving late at night could lower a score, disproportionately affecting low-income individuals who work night shifts.
What Can You Do to Protect Your Driving Data?
To protect your privacy and ensure you are aware of what data is being collected:
- Check Privacy Settings: Review the privacy settings on your car’s dashboard and any connected apps. Look for options that allow you to control what data is shared.
- Be Informed: When installing apps, read the permissions and data usage policies carefully. Consider opting out of unnecessary tracking features if possible.
Summary
Driving scores represent a shift towards a more behavior-based approach to auto insurance. While they hold promise for fairer premiums and safer roads, it is crucial for consumers to be aware of how their data is collected and used. By staying informed and vigilant about privacy settings, drivers can better navigate the road to fairer auto insurance.
The information provided does not, and is not intended to, constitute legal advice; all information is for general informational purposes only. This information may not constitute the most up-to-date information. The links provided are only for the convenience of the reader, A. Ferraris Law, PLLC and its members do not endorse the contents of the third-party references.
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