Auto Insurance Trackers: Worth The Cost?

Auto insurance trackers are devices or apps that monitor your driving behaviour and reward you with discounted insurance rates if you are deemed a safe driver. While this may be appealing to some, others have expressed concerns about privacy and the potential for their data to be used against them.

Privacy concerns

Auto insurance trackers monitor your driving behaviour and relay this data back to your insurance company. This data includes your driving speed, braking habits, cornering behaviour, time of driving, distance travelled, and phone usage. While this data can be used to offer lower insurance rates to drivers who exhibit safer habits, it also raises privacy concerns.

One of the main privacy concerns with auto insurance trackers is the potential invasion of privacy. Every time you drive, your route may be tracked, revealing your daily routines, frequented places, and personal appointments. This data could be collected and used for purposes other than determining insurance premiums, such as marketing or sold to third-party marketers or other entities. Some people may feel that this constant monitoring is an invasion of their personal freedom and a safety risk.

Another concern is the potential for data breaches or hacking. While insurance companies may have security measures in place, there is still a risk of sophisticated cyber-attacks accessing this data, leading to identity theft or misuse. Additionally, there have been instances where data from these devices has been subpoenaed in legal cases, turning driving habits into evidence against the driver.

It is also important to note that the definition of "safe driving" by these devices may not always align with regular driving habits. Minor driving mistakes, which wouldn't typically affect insurance premiums, could be counted against the driver by the device, leading to unexpected rate hikes.

Furthermore, some insurance tracking devices have been blamed for damaging cars. There have been claims that these devices can drain car batteries or destroy electrical systems, especially if not installed correctly.

Finally, over-relying on these devices might make drivers complacent, thinking that as long as the device registers safe driving, they are entirely in the clear. However, driving requires constant attention and adjustment, and relying solely on the device's feedback may not be sufficient to ensure safe driving habits.

Discounts may be minimal

While auto insurance tracking devices can offer discounts, the savings may not be substantial. According to a report by the Pew Research Center, 45% of people find the trade-off of personal information for benefits unacceptable. Some people who have tried these devices have reported minimal discounts, with one person claiming their discount amounted to barely 1%.

Reviews suggest that excellent drivers who don't put more than 7,500–8,000 miles per year on their car can achieve savings of around 30%. However, the more you drive over that amount, the smaller the discount becomes. It's important to note that long commutes could result in higher insurance costs, as you'll be paying a base rate plus a per-mile rate.

In addition, certain driving behaviours can negatively impact your rating and, consequently, your discount. For example, using your phone for mapping, driving in bumper-to-bumper traffic, and hard braking can all result in demerits.

While insurance tracking devices can help safe drivers achieve discounts, the savings may not be significant, and certain factors can reduce the discount further.

Data may be sold

Data collected by auto insurance trackers may be sold to third parties. A New York Times report revealed that automakers such as General Motors share customers' driving behaviour data with data-collection companies, which then sell this information to auto insurance companies. In one example, a driver's insurance rates increased by 21% after his data was shared with his insurer without his knowledge.

Auto insurance companies are not the only potential buyers of driving data. Other possible purchasers include life insurance companies, car rental companies, and attorneys.

Some people are uncomfortable with the idea of their data being sold. One person quoted in a Pew Research Center article said:

> "I am not comfortable having my location tracked. I feel this is an invasion of my privacy and a safety risk."

Another said:

> "I would have to know more. I like the part about the speed. But, as far as where a person goes, it is their private personal business. I would agree to allow them to track distance or mileage, but, not actual location."

While some people may be happy to share their data in exchange for benefits such as discounted insurance rates, others feel that the trade-off is not worth it.

May not be suitable for certain areas

Auto insurance trackers may not be suitable for certain areas due to various factors, including local laws and regulations, privacy concerns, and the potential for discriminatory practices.

Firstly, the legality of auto insurance trackers varies by jurisdiction. Some areas may have laws or regulations that prohibit or restrict the use of tracking devices or the collection of certain types of data. For example, laws related to privacy, data protection, or surveillance may impact the use of auto insurance trackers.

Secondly, auto insurance trackers rely on collecting and transmitting data about an individual's driving habits and location. In areas with limited or unreliable cellular or GPS coverage, the trackers may not function effectively or provide accurate data. This can impact the ability of insurance companies to offer discounts or adjust rates based on driving behaviour.

Additionally, privacy concerns are heightened in certain areas, particularly those with a high population density or a history of surveillance or data breaches. Individuals in these areas may be more hesitant to share their location and driving data with insurance companies, especially if there are concerns about data security or the potential for data to be sold to third parties.

Furthermore, auto insurance trackers have been criticised for their potential to perpetuate discriminatory practices. In areas with a history of racial profiling or other forms of discrimination, there may be concerns about how the data collected by insurance trackers could be used to target or penalise certain groups. For example, if insurance trackers collect data on driving behaviour in an area with a significant racial minority population, there is a risk that the data could be used to justify higher insurance rates or unfair denial of claims for individuals from those communities.

Lastly, auto insurance trackers may not be suitable for certain areas due to local driving conditions and patterns. For instance, in areas with heavy traffic congestion, frequent hard braking and acceleration may be unavoidable, leading to lower ratings and increased insurance rates. Similarly, in regions with poorly maintained roads or challenging terrain, drivers may consistently experience rapid acceleration or hard cornering, which could negatively impact their ratings.

In conclusion, while auto insurance trackers can offer benefits in the form of discounted rates for safe driving, they may not be suitable for certain areas due to legal, privacy, ethical, and practical considerations. It is important for individuals to carefully consider the potential implications of using auto insurance trackers and for insurance companies to address these concerns through transparent data practices and fair rating systems.

May not be suitable for certain drivers

While auto insurance trackers can be a great way to save money for safe drivers, they may not be suitable for certain drivers.

Firstly, insurance trackers are not ideal for those who are uncomfortable with giving up their privacy. The data collected by these trackers includes personal information such as driving speed, location, acceleration, braking habits, turning habits, and phone usage. This information can reveal private details about an individual's life, such as where they were on a certain date and whether they regularly speed. While some people may be comfortable with this level of monitoring, others may find it invasive and a risk to their privacy.

Secondly, auto insurance trackers may not be suitable for drivers who frequently use their phones for mapping or navigation. Since phone usage is tracked and can count as distracted driving, those who rely heavily on their phones for directions may be penalised and lose out on potential discounts.

Additionally, drivers who tend to drive long distances or have long commutes may not benefit from insurance trackers. Usage-based insurance (UBI) programs often offer pay-per-mile rates, which can result in higher insurance costs for those who drive more miles. Therefore, insurance trackers may not be cost-effective for those who drive frequently or over long distances.

Furthermore, insurance trackers may not be advantageous for drivers who often encounter heavy traffic or live in areas with busy roads. Driving in bumper-to-bumper traffic can lead to hard braking, which is penalised by the trackers. As a result, drivers in congested areas may find it challenging to achieve significant discounts or maintain a positive rating.

Lastly, auto insurance trackers may not be suitable for individuals who have concerns about how the collected data will be used. While the data is intended to assess driving habits, there is a risk of it being used against the driver in insurance claims or legal cases. For example, in the event of an accident, the driver's own insurance company could use the tracking data to deny or reduce compensation for a claim. Additionally, there may be concerns about data security and the possibility of the insurance company selling the data to third parties.

In conclusion, while auto insurance trackers can offer benefits in the form of discounted rates for safe drivers, they may pose challenges for certain drivers due to privacy concerns, phone usage, high mileage, traffic conditions, and potential negative implications in insurance claims or legal cases.

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