Usage based insurance raises concerns over privacy

usage based insurance data security

usage based insurance data securityThe wireless monitoring devices that can lower premiums are making people wonder about data sharing.

The wireless technology that is installed in a vehicle in order to take advantage of the possible savings from usage based insurance is starting to cause some concern among consumers who are becoming increasingly aware of the risks they are taking with regards to sharing their personal information.

Some wonder precisely what is being collected and how it is being used and stored by insurers.

The concept behind usage based insurance is that a wireless device is installed in the policyholder’s car. This gadget collects and transmits information about the driving habits of the motorist, including speed driven, instances of hard breaking, number of turns, and others. Some device also collect data such as location, time that the vehicle is driven, and more.

This specific collection of data makes some people wonder about their usage based insurance privacy.

Usage based insurance companies, such as Progressive, State Farm, and Allstate, use the data that they collect in order to be able to apply discounts to premiums, when applicable. This way, safer drivers can prove that they have a lower risk so that they don’t need to pay as much as riskier drivers.

These usage based insurance programs have become highly popular and their use is rapidly growing. This is because they come with the opportunity to save 20 percent or more, which is highly appealing to most drivers. That said, people are starting to wonder if the savings is worth what they are giving up.

According to an Insurance Council of Texas spokesperson, Mark Hanna, though there are advantages, there are drawbacks, as well. He stated that “The big benefit is low insurance premiums.” However, he also added that “The opposite viewpoint is basically Big Brother is watching me.”

Hanna has noted that while low mileage drivers, especially those who are elderly, may jump at the opportunity to save through usage based insurance programs, younger drivers may not find this as appealing. This demographic does not want to share their driving habits with their parents or their auto insurance companies.

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