Auto insurers have been trying to incentivize customers to allow them to track their driving habits for years. Many privacy-conscious individuals have declined this offer, but insurers have found a way around this by forming partnerships with other apps to monitor driving behavior.
By collecting data on how risky a driver is to their bottom line, auto insurance companies can determine how much each driver should pay for coverage. This has become increasingly important as car insurance rates have reached a 50-year high, surpassing inflation and leading to higher premiums and deductibles.
In a world where various factors, such as age and local climate events, can affect insurance rates, some may find it appealing to have their risk assessed based on something they can control, like driving habits. However, most families are unaware that the phone apps they use in the background are sharing their driving data with insurers.
Apps like Life360, MyRadar, and GasBuddy use driving analysis technology operated by Arity, an Allstate company, to collect data and form a driving score that can be sold to insurers. The opt-in consent on these apps is often small and vague, leaving many customers unaware that they are sharing their driving data.
Arity claims that this data has significant value for businesses and consumers alike, as it can help create smarter and safer transportation solutions. However, the lack of transparency around data sharing has raised concerns about privacy and consumer rights.