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Whose Watching You?

The public recently learned that the insurance industry uses credit scores to help determine auto insurance premiums and to predict the likelihood that you will be involved in a car accident. Our Miami, Florida car accident lawyers have discovered that some insurance companies offer discounted premiums to drivers who will allow an electronic device to be installed in their automobile to track certain driving behaviors.

What they often fail to disclose is the fact that the data gleaned from those devices (eg. Progressive’s Snapshot or Allstate’s Drivewise) might actually be used to increase your premiums.

The Palm Beach Post recently exposed that while companies tout savings of 30-50 percent, what they don’t disclose is that they can also raise your rates. The Post also reported remarks made by an executive of Ford motor Company which have created some unease about what behaviors companies monitor and what they do with the data – “we know everyone who breaks the law” by speeding thanks to GPS devices. Although the executive quickly clarified that, at this time, it does not use the data without the customer’s consent.

According to The Post, 1.5 million progressive customers have signed up to participate in the Snapshot program. Progressive’s General Manager said about two-thirds of those who sign-up get discounts ranging between 10-15 percent.

So what is being tracked? Most drivers understand that distance and how many miles they drive are recorded; however, beyond that, most do not know what else is monitored. According to Princeton Survey Research Associates for InsuranceQuotes.com, factors monitored can also include your speed, when you drive (time of day) and how hard you brake.

In 2013 and 2014, Ford models will temporarily start storing latitude, longitude and time stamps in buffers for up to 2-3 weeks. Many are concerned that this and other data may be shared with third parties like the insurance industry or law enforcement agencies. Time will tell if this invasive technology will help or hurt consumers and how the insurance industry will use it to set premiums.

“Consumers have long been wary of insurance companies monitoring how they drive, as well as about privacy issues. This latest attempt {by progressive to monitor driver locations} could pave the way for insurers to use location tracking to raise insurance rates for people who drive in riskier neighborhoods – those with either higher crime or higher incidence of accidents,” said Frederick Lane, author of “American Privacy: The 400-Year History of Our Most Contested Right.”

The Consumer Federation of America supports insurers’ efforts to collect better data to establish rates, with two caveats: transparency, and proof that any data collected is related to driving risks. The association of nonprofit consumer organizations has long opposed insurers using such factors as credit scores, education and occupation to influence rates, because it believes those have little to do with someone’s driving ability.

It is arguably wrong for insurers to use behaviors which may correlate to accidents in order to determine rates when there is not always a demonstrable causal relationship between the two. As the insurance industry continues to use ever changing technology and data to distinguish a “good driver” from “bad driver” and what rates to charge, the best way you can influence your premiums is to drive safely and responsibly.

If you or a loved one has been injured in an automobile accident, contact a Miami, Florida car accident lawyer today for a free consultation.