Is your phone tracking your braking and speeding habits through apps?

Data from certain smartphone apps is now being utilized by auto insurers to evaluate drivers’ habits and set rates. This data, sometimes obtained without the driver’s knowledge or consent, is collected from popular apps like Life360, MyRadar, and Gas Buddy and sent to companies like Arity, which is owned by Allstate. These apps use telematics technology to transmit sensor and motion data from smartphones, which Arity then analyzes to create a “driving score” measuring behaviors such as distracted driving, speeding, and sudden braking.

Consumers who use these apps may unknowingly consent to sharing their data, but they have the option to opt-out of the process. For example, GasBuddy users can enable a feature that assesses their fuel efficiency, powered by Arity, after agreeing to their privacy statement. However, the agreement details may not always be clear, as seen in the small font size of the consent information compared to the prominent “Join Drives” button.

The aim of this data collection is to better predict individual drivers’ risk levels to establish fairer auto insurance rates. This approach is seen as more equitable compared to traditional methods that consider socioeconomic factors like credit scores, education level, or marital status, leading to potential unfair discrimination. Telematics technology offers promise in providing a more accurate assessment of a driver’s risk, potentially benefiting consumers by more accurately pricing auto insurance.

Not all insurers utilize Arity’s driving data, with companies like GEICO and USAA gathering driving behavior information solely from users who voluntarily download a dedicated app for tracking purposes. This alternative approach ensures that only individuals who choose to share their data have their driving habits evaluated for insurance rate adjustments.

In conclusion, the utilization of telematics technology and smartphone app data for setting auto insurance rates represents a shift towards a fairer and more personalized evaluation system. Despite concerns about privacy and transparency, this approach holds promise in revolutionizing the auto insurance industry by providing a more accurate and unbiased assessment of individual drivers’ risk levels.