State Farm attracting attention over new program
Since early December, 2012, State Farm has been offering significant auto insurance discounts for those participating in the company’s Drive Safe and Save program. Currently, this program is only available to drivers in Wisconsin, a state well known for its privacy advocacy. State Farm suggests that the program can help drivers save money on their insurance coverage, but some state officials suggest that the information that the insurer could obtain through the program outweighs the potential benefits that consumers may see.
Small device records a driver’s habits
The program makes use of a small device that is installed within a vehicle’s diagnostic port. The device can track the miles a vehicle travels and record how well the vehicle performs and how well it is being handled by a driver. The system is very similar to one developed by Esurance, which is also used in a program designed to help consumers save money on their auto insurance. The problem is, of course, that such programs are not designed solely for the benefit of consumers.
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Information collected through program could be used by advertisers
The device used in the Drive Safe and Save program from State Farm is capable of collecting a wide variety of information of those participating in the program. Apart from personal information, such as name, phone number, and address, the device also records location-based information, such as where a driver is going and how long they stay there. While this information may seem very mundane, it is exceedingly valuable to advertisers as it can be used to develop engaging and effective marketing campaigns.
Lawmaker shows concern over auto insurance initiative
Senator Jon Erpenbach, a champion for privacy in Wisconsin, claims to have serious concerns regarding the program. The Senator notes that the program can provide participants with a 5% discount on their auto insurance policies, but that the information given away as part of the program may not be worth the savings. State Farm claims that the actual discounts consumers could see through their participation in the program is closer to 10%.