The Consumer Federation of America (CFA) and Consumer Reports (CR) urged New York state legislators to oppose A7614/S07129, a bill relating to the use of telematics programs by auto insurance companies. This bill would not meaningfully protect consumers or ensure that telematics has adequate regulation or oversight. Instead, it would perpetuate the status quo, weaken already existing regulations and allow insurers to collect and use data, including location data, as they see fit.

Telematics, or usage-based insurance, are insurance programs that capture consumers’ driving data via devices, built-in technology, and mobile phones. The programs use that data to assess consumers’ driving behavior, driving patterns, and sometimes additional data, to calculate insurance premiums.

While telematics holds potential for both encouraging safer driving and increasing fairness in pricing, telematics needs thorough oversight and guardrails for consumers. Instead of A7614, the legislature should pass a different telematics bill, S553. Sponsored by Senator Kevin Thomas, S553 provides a framework to allow telematics to offer benefits to consumers while ensuring fair pricing and protecting consumers from unfair and unnecessary exploitation of the data collected by insurers.