As lawyers who handle wrongful death as well as other car accident cases, we are keenly aware of the effect that motor vehicle accidents can have on insurance premiums. Every motor vehicle owner is required by Kentucky law to carry insurance for each vehicle owned, or severe penalties will be assessed. Insurance premiums are a necessity and they will likely increase if you are involved in an accident. To reduce your premiums, you may be considering new options being offered by insurance companies.
More and more insurers are offering discounts to drivers that agree to install a device in their car that will monitor their driving style. Progressive offers Snapshot, State Farm offers Drive Safe & Save with In-Drive, and Allstate has Drive Wise. The company sends you a device, called a telematic device, that you plug into the vehicle’s diagnostic port, usually under the steering wheel, and the company monitors your driving habits. The cautious driver who drives fewer miles would likely pay lower insurance premiums since they’re less likely to be involved in an accident. However, the device becomes an electronic snoop and wirelessly transmits information to your insurer detailing not only how far you drive, but also when you drive, how fast you accelerate and turn, and how hard you accelerate, brake and corner. The drawback to using these devices is a loss of privacy and possible use of the information against you.
It appears that many drivers are willing to install the telematic devices and transmit detailed driving data to their insurer in the hopes of receiving a discount, and a recent study commissioned by Ford may explain their willingness since the study found that 99 percent of drivers believe they are good drivers. Of the participants in the study, however, 76% admitted they eat or drink while driving, 55% admitted to speeding, 53% talk on handheld phones, 37% drive even when they’re too tired and 25% use their phones to search contacts. So, even though you may think you’re a safe driver, the information sent to your insurer may paint a different picture and may not get you the discount you hoped for.
Another serious issue with the telematic device is the “Big Brother” nature of the scheme since by installing the device, you’re giving up your privacy. You’re giving the insurer access not only to your driving behavior, but also to your social behavior, and the information being compiled can be used against you in many ways. You will be providing your insurance company with information about your private life and if, say, you drive late at night when the bars close, your insurer will know.
Like other insurance companies, State Farm states in its privacy policy that the information it gathers will be shared as permitted or required by law. Thus, the information could be shared with the police investigating an accident or released to a party suing you after an accident. Since some of the devices, such as State Farm’s Drive Safe & Save with In Drive, use GPS, the device will also collect geographical data. Although State Farm says the GPS data will not be used to set premiums, the data is collected nonetheless and subject to being disclosed as required in police investigations and court actions. After a car wreck or other accident, the information could be used against you to establish that you were negligent and, therefore, liable to another party. It could also be used in other legal actions such as a divorce case to prove a driver’s location if the spouse is claiming infidelity.
If you are considering installing a telematic device in your vehicle, think carefully about the “Big Brother” nature of the device and consider the private information you will be turning over to your insurer and possible third parties who may obtain it after a motor vehicle accident or through court actions. When you weigh the costs and benefits of such a device, a possible slight reduction in premium may not be worth the added downside described above.