Would you be willing to give up personal information in exchange for a chance of having lower rates? This is, essentially, what many car insurance companies are offering to drivers, when they offer “telematic devices” to their carriers. These tracking devices are meant to monitor how a person drives and rewards them for being safe and defensive drivers. Although we use insurance companies as a means to financial protection, at the end of they day their goal is to collect as much money as they can while at the same time paying out as little as possible in our behalf.
It is not unusual nowadays for corporations to collect copious amounts of data (I’m looking at you Google) from its users, so it is crucial to be aware of what kind of information these kind of tracking devices are collecting, and how these insurance companies plan on using them. So while these companies offer “safe” drivers to use these tracking devices to lower their rates, they’ll also take any chance they get to penalize a “bad driver”. Here are some important things to consider before putting a tracking device in your vehicle.
The incentive for these trackers is to lower rates for insurance carriers, proving to insurance companies that you are a safe driver. This kind of technology has actually been around since 1998, with Progressive Insurance being the first company to introduce telematics tracking. However in 2013, the company began to collect data with intent of penalizing drivers as well for poor driving maneuvers. Since then, other car insurance companies also offer these trackers to their carriers. Therefore, always consider the potential that if you drive in a way that the trackers deem unsafe, you could hurt your car insurance bill rather than help it.
It is important to get the facts about how your insurance companies handles these tracking devices with your rates. Some companies offer a lower rate right away for using it, while other insurance companies require you to use it for a few months before they do anything. It’s important to remember that, as of right now, using these telematic devices are optional. If you opt in to a tracking program but it doesn’t actually save you any money, you might be able to opt out without any problems. Progressive says that its program determines whether or not to offer rewards or discounts based on six months’ worth of tracker use. Other insurance companies consider discounts as long as the tracker’s being used, but if they’re notified that the tracker is disabled or disconnected, the driver will lose any discount they’ve earned.
Although you might not realize it, if your car less than 25 years old, there is most likely a computer system (called OBD-II) built inside of it. To access the system, most cars have a port that allows you to get into the system to analyze data. In fact, you might notice mechanics using this port to run error logs to detect problems in your car. This same port is where the tracker goes and how it is able to analyze your driving habits.
Not every insurance company discloses what information they are collecting, and ultimately it’s up to you to decide if those terms are acceptable for you. Regardless of what they choose to tell you, OBD-II computer software is able to find, store and transmit any data in the vehicle’s computer.
These trackers are trying to determine driving habits. Common information it will collect is how fast the driver tends to go, how hard they hit the brakes, and even tracks the GPS location of the vehicle. The internal GPS will help the telematics device determine your speed versus the speed limit in that area; as well as how often you drive at night and in areas of high crime risk. In newer vehicles, where safety features such as emergency braking and collision warnings are present, the tracker will record how often the driver needs to use these safety features.
This is a question that each individual has to ask themselves. Some feel it is too invasive of their privacy, feeling that the GPS tracking is just too much information for the corporation to have on record. Some feel that eventually, with locations being recorded, that insurance companies could one day market that information to advertisers based on when and where their carriers are driving. Others fear that they will be penalized rather than discounted, and fear that those unexpected situations where you need to defensively brake hard will be used against them. Others still who did opt for the tracker and drove extremely carefully, reported that they still didn’t get a discount.
On the other hand, some companies give a discount right away for installing one, so it might be worth it to get a lower car insurance bill. No matter what you do or how you feel about these trackers, it’s good to understand just how the technology functions, and what that means to a car insurance company. And who knows, one day you might not have a choice and it could only be a matter of time before they become mandatory by car insurance companies for their carriers.
Steven Palermo is the managing partner for Palermo Law, Long Island’s Personal Injury Law Firm. He has been helping people receive compensation for their injuries for over 21 years. He focuses on cases involving car accidents, truck accidents, construction accidents and slip and fall injuries.
His book The Ultimate Guide to Handling New York Car Accident Claims details the ins and outs of a car accident claim in a simple, easy-to-read manner.