Data privacy issues
How you view and understand the risks of having to give up your privacy by being tracked or monitored is what really would determine if the discounts are worth it or not.
Aminov-Tobin was not perturbed and says that in order to get the best rates, a little sacrifice is quite needed.
However, Jen King, a privacy expert and the Center for Internet and Society at Stanford Law School’s director of consumer privacy, says that the sacrifice drivers make may be more than what they realize.
King says that where you go every day tells people a lot about where you live, what your interests are and those you’re associating with.
She adds that even if the information isn’t the one being sold, it might be used in ways that drivers don’t expect.
Purdue’s Zhu says that another danger imposed by this is data breach. She was talking about the Target breach that happened in 2013 where personal information of millions of its customers were stolen.
She says that she found in her research that after the breach, drivers have been more likely to cancel their usage-based car insurance.
However, it seems that UBI getting more attention. A study done by J.D. Power shows that in 2018, 10% of insurance clients used these programs which is higher than the 8% from the previous 2 years.
It’s been estimated by the National Association of Insurance Commissioners that 7 out of 10 car insurers will opt to use monitoring technology by next year.
It pays to ask before buying
It’s so important to shop around and ask questions first because not all usage-based insurance policies are the same. Some focus on mileage while others track acceleration, idling, and braking. Some keep on tracking while others monitor driving only for a time.
CFA’s Hunter advises to gather what data will the insurer collect and if it’s really relevant to safe driving. Other questions you need to ask would be:
1) Is there a penalty if you refuse to share the information?
2) Is the company going to sell or share your data?
3) How does each detail of data affect your rate?
Janet Ruiz, director of strategic communication for the Insurance Information Institute says to keep in mind that the driving data is only one part of your insurance rate and still the most significant thing you can do about your insurance is to have a clean and safe driving record.
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