In a letter to the New York Senate Insurance Committee, the Consumer Federation of America urged the Committee to support the bill S5486/A10364, which adds consumer protections and requires disclosures by automobile insurers relating to the use of telematics systems for determining customers’ insurance premiums.
The bill will promote transparency, ensure that telematics-derived premiums are fairly priced, safeguard consumer privacy and consumer data, and guard against unfair discrimination in these programs.
Telematics, or usage-based insurance (UBI), 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 other qualities to calculate their insurance premiums. While these programs show some promise for reducing the number and severity of auto accidents and encouraging safer driver behavior, they also result in major concerns about privacy, abuse of consumer information, unjustified pricing, and unfair discrimination.