Data about driving habits is taken from some smartphone apps – sometimes without the driver’s knowledge or consent – and passed on to vehicle insurers as a rate-setting tool. According to latest report in Novel York Times – Which reported in March that data agency LexisNexis sold similar connected car data to General Motors — many popular apps, including Life360, MyRadar and Gas Buddy, share user data with Allstate’s Arity.
The report shows that these and other applications exploit telematics to relay sensor and motion data transmitted by smartphones. According to the newspaper, Arity analyzes this information to formulate a “driving score,” which measures driving behavior such as distracted driving, speeding and sudden braking. Insurance companies buy the results, and experts say most people don’t realize they’re being tracked this way.
Companies that collect data claim that consumers consent to sharing this information and that they can opt out of the process if they wish, perhaps when they find that they initially consented without realizing it.
For example, in GasBuddy, users can enable a feature that evaluates the fuel efficiency of their drives, a feature “powered by Arity.” The company says users “accept Arity’s privacy policy before agreeing to exploit the Drives feature.”
However, according to the report, “this agreement is written in petite gray font beneath a gigantic red button that says ‘Join Drive.’ The petite disclaimer simply says that by clicking “Join Drives,” you will be sharing “certain information” with Arity and agreeing to Arity’s hyperlinked privacy statement. The language doesn’t explain what Arity is or what it does. The company sells access to driving results to tens of millions of people. According to Allstate’s website, insurance companies can “request an individual’s driving score, which is provided immediately.”
Reports suggest that not all insurers exploit Arita’s driving data. Spokesmen for GEICO and USAA said they collected data on driving behavior only from people who downloaded a dedicated smartphone app to track their driving.
On the other hand, the issue with ratings – which ultimately determine how much you pay for car insurance – is that “it could more accurately predict risk for individual drivers and provide a fairer way to set rates,” the story says.
“There is a lot of unfair discrimination in motor insurance.” – said Micheal DeLong of the Consumer Federation of America. “Insurance companies take into account many socioeconomic factors, such as your credit score, job, or education level, such as whether you went to high school or college, or whether you are married.”
DeLong found that people with destitute credit pay significantly more for car insurance, even if they have a immaculate vehicle record. “Telematics holds great promise for consumers and could be a way to get a better price on car insurance,” he added.
Several other anecdotal stories are described Times in an article titled “Is Your Ride Secretly Rated?” Is available Here; subscription may be required.
