Telematics is transforming car insurance, rewarding good drivers with big savings. But it’s not without trade-offs.
Key takeaways:
- Safe driving insurance apps collect driving data to identify driving behaviors.
- This usage-based insurance feature can lower the premiums of careful drivers.
- Privacy considerations and program limitations are two downsides to seriously consider.
With the average annual premium for full coverage auto insurance sitting at $4,021 for New Yorkers, drivers in the Empire State are looking for every possible way to save.
And telematics, while no longer a novelty, are playing a bigger role in helping drivers cut costs and drive safely.
Telematics, which are essentially safe driving insurance apps, help drivers earn auto insurance discounts in New York. These apps collect the user’s driving and location data and use that information to adjust their premiums accordingly based on driving behavior. They also make the driver easier to locate in the event of a roadside emergency.
Sounds fair enough, but the use of telematics has been a source of ongoing legal debates that question the ethics and privacy concerns of using consumer driving data.
That’s why, in this article, we’ll explore that conversation for New York drivers, illustrating how telematics can help you save on insurance while staying aware of how your driving data is truly being used.
What Telematics Apps Are and How They Track Behavior
Telematics allows your insurance provider to monitor your driving habits and location. This usually happens through your phone’s GPS, but some insurers may provide separate devices.
The factors that these safe driving insurance apps can analyze are numerous. The auto insurance discounts in New York that actually apply depend on your provider and policy.
But some of the typical metrics are:
- Acceleration and deceleration rates (particularly how often you come to a sharp stop).
- Miles driven annually.
- How you approach corners.
- The times of day at which you drive.
- Adherence to speed limits.
Sharing this data helps your auto insurance provider recognize careful, responsible driving and road habits that, ideally, result in auto insurance discounts.
These safe driving insurance apps can also monitor how often you use your phone on the road, hands-free or otherwise.
Yes, insurers may penalize policyholders by marking them down for excessive phone use (which is already expensive enough, not to mention highly dangerous), but even that’s ultimately an incentive toward developing safer, more cost-effective driving habits.
How Much Could You Save with Usage-Based Insurance in New York?
It’s likely your insurer offers a safe driving insurance app if you’re with one of the big names, like Allstate, GEICO, State Farm, Liberty Mutual, or Progressive. How much you’ll actually save depends on two factors, starting with the insurer itself.
Taking Allstate as an example, enlisting in their optional Drivewise program offers immediate insurance savings simply by participating, though the actual amount you can save varies by state.
Unfortunately, it’s impossible to define precise numbers for these auto insurance discounts in New York; that’s ultimately down to your specific driving behavior. Still, the core benefit of these packages is clear: the more safely you drive, the less you’ll pay for your auto coverage thanks to a personalized rate at renewal.
There are also potential savings beyond your car insurance. Since safe driving insurance apps exist to encourage less risky road behaviors, it’s quite possible you could save money in the future on auto repair or even medical bills from accidents.
Auto insurance discounts in New York are certainly an attractive prospect. But it’s best to know the other side of the story before adding these apps to your coverage.
How Privacy Considerations Are Drawing Criticism
Safe driving insurance apps aren’t quite as secure as they sound. The sheer amount of data they gather and how they use it has raised concerning issues for both consumers and policymakers.
The problem is gathering such attention that it’s leading to nationwide lawsuits and crackdowns from state authorities. Here’s a summary of the key issues driving the pushback:
- Providers of safe driving insurance apps are being accused of selling the data of millions of Americans.
- Some insurers and auto companies like General Motors are facing legal action for sharing data with other companies, without customer consent.
- These unethical exchanges of telematics can be used to profile drivers without their knowledge and affect the level of auto coverage and loan rates they’re offered in the future.
The Federal Trade Commission has already taken action to halt the sale of driving data in some areas. If you’re interested, you can contribute to their mission of creating more customer-friendly auto insurance discounts in New York by signing this Consumer Reports petition.
Multiple states have also proposed bills to counter the exploitative aspects of safe driving apps and push for greater transparency in the process, with New York’s Senate Bill S5486 currently active in this regard.
Program Limitations of Safe Driving Insurance Apps
These apps rely on well-calibrated devices delivering reliable data. The problem is that, like anything, technology can be flawed, prone to malfunctions and glitches.
This means that even the safest, most responsible drivers could find themselves the victims of false readings if either their phone, insurer-provided device, or GPS decides to deliver erroneous data.
At that point, it would be the customer’s word against the insurer’s. It could become a frustrating and potentially expensive exercise to provide hard data proving technology was at fault and clear up any confusion.
What to Consider When Making Your Decision
Signing up for safe driving insurance apps is quick, free, and available to most drivers across a variety of vehicle types. The purpose is simple: drive more safely, and you’ll save.
You should also be able to easily opt out of having your auto data shared if you don’t feel it’s worth the privacy risk. Always check with your insurer to see what else you might lose by opting out, such as more efficient roadside assistance.
NICRIS is here to help you find auto insurance discounts in New York by offering a completely free, hour-long insurance review. Alternatively, you could send us a question via our contact form, or speak directly with us at our office.
Don’t hesitate to get in touch. We’re here to help!