Is Your Driving Being Secretly Scored?
In recent years, the collection of data on drivers’ habits has become a hot topic. The New York Times recently reported that certain smartphone apps are downloading data about drivers’ behavior and forwarding it to auto insurers, often without the driver’s knowledge or consent. One company at the center of this issue is Arity, an Allstate-owned company that analyzes the data collected from popular apps like Life360, MyRadar, and GasBuddy.
These apps use telematics to relay sensor and motion data from smartphones, which is then crunched by Arity to create a “driving score.” This driving score measures various behaviors behind the wheel, including distracted driving, speeding, and sudden braking. Insurance companies then purchase these scores to help determine rates for individual drivers. However, what is concerning is that most people are unaware that their behavior on the road is being tracked in this manner.
Arity and other companies that collect this data argue that consumers consent to sharing their information and can opt-out of the process if they choose to. For example, on GasBuddy, users can turn on a feature that rates the fuel efficiency of their drives, a feature “powered by Arity.” Users must agree to Arity’s privacy statement before opting into this feature. However, the agreement is presented in small gray font under a big red button labelled ‘Join Drives.’ This placement and presentation may cause users to overlook important information about what Arity does with their data.
Arity sells access to the driving scores of millions of people to auto insurance companies. Allstate’s website states that insurance companies can request an individual’s driving score, which is delivered instantly. However, not all insurers are using Arity’s driving data. Spokesmen for GEICO and USAA stated that they only collect driving behavior data from individuals who have downloaded a dedicated smartphone app.
From the perspective of insurers, using this data to determine driving scores could be seen as a fairer way to set rates. Currently, auto insurance companies heavily rely on socioeconomic factors like credit scores, job status, and education level to determine rates. This means that even drivers with clean records may have to pay more if they have a poor credit score. Michael DeLong of the Consumer Federation of America believes that telematics could help address this issue and provide a more accurate prediction of risk for individual drivers.
While the potential benefits of using driving data for insurance pricing are evident, concerns about privacy and transparency remain. It is crucial for apps and companies like Arity to ensure that users are fully informed and aware of how their data is being used. The placement and clarity of consent agreements should be improved to prevent users from unknowingly sharing their information.
In conclusion, the practice of secretly scoring drivers based on their behavior behind the wheel raises important questions about privacy, consent, and fairness in auto insurance pricing. While telematics offers promise in providing a more accurate assessment of risk, transparency and user awareness must be prioritized to address concerns and build trust among consumers.