Tech reporter Kashmir Hill discusses the use of driving data by automakers to influence insurance prices. The podcast explores concerns over data collection, consent issues, and the debate on using real-time driving data for setting auto insurance prices.
Automakers use driving data to influence insurance prices without user awareness.
Insurance rates are affected by driver scores based on driving behavior data sharing.
Deep dives
Life360 App and Privacy Concerns
Kathleen Lomax, a worried mother from New Jersey, began using the Life360 app to track her twin daughters' driving habits and locations. Although she paid $100 annually for the service to ensure their safety, she was shocked to discover that the app shared driving behavior data with an insurance analytics company called Airti for personalized auto insurance quotes. This revelation led Kathleen to request a refund and delete the app from her family's devices, citing concerns about the lack of transparency regarding data sharing.
Driver Score Impact on Insurance Rates
Reporter Kashmir Hill uncovered how automakers like General Motors collected and shared extensive driving data without full disclosure to users, affecting insurance rates. The driver score, which assesses driving behavior like speeding and braking frequency, emerged as a new metric influencing insurance costs. Insurance companies utilize factors such as credit scores and driving history alongside driver scores to determine personalized insurance rates, highlighting concerns about privacy and consent in data collection.
Data Monetization and Consent Challenges
Companies like Airti, a subsidiary of Allstate, profit by selling driving behavior data acquired from apps like Life360, GasBuddy, and MyRadar to insurance companies for risk evaluation. Despite claims of obtaining user consent, the complex nature of digital permissions and disclosures raises questions about data privacy and transparency. The practice of tracking driving habits through apps for insurance purposes raises ethical dilemmas regarding surveillance, consent, and the fairness of insurance rate calculations.
As cars get smarter, automakers - with the help of third-party apps - are leveraging the new data they’re able to collect on people's driving habits to influence drivers’ insurance prices. The problem? Most people aren’t aware their driving is being monitored.
Guest: Kashmir Hill, tech reporter for the New York Times.
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