Americans have become more privacy-conscious this century with the maturity of the digital age. There are practical reasons for that as well with scams and identity theft presenting an ever-present threat online.
However, there are several instances where choosing to sacrifice some privacy can save you money.
For example, your auto insurance may monitor your driving in exchange for a discount on your premiums. Should you let them? That’s what a listener of the Clark Howard Podcast recently asked.
Should I Let My Auto Insurance Monitor My Driving?
Is it OK to let my auto insurance monitor my driving via a mobile app?
That’s what a listener wanted to know on the March 15 podcast episode.
Asked Mitt in Minnesota: “What are your thoughts on allowing insurance companies to monitor driving? USAA will give up to a 30% discount for safe driving. With a teenage boy, our rates are sky-high. What harm could be lurking if we install their monitoring app, and is it worth it?”
Progressive Insurance first experimented with this technology in 2006, Clark says. Insurance companies are monitoring your speed, the suddenness of your starts and stops, rapid lane changing, phone use while driving and other things. They’re using predictive analysis to determine your true risk factor.
Clark is keenly aware of the historic driving data involving teenage boys and young men. The potential for money-saving isn’t the only reason you may consider adding the privacy invasion for your son.
“If your teenager is a very different driver or becomes a very different driver when they’re being monitored, this could save your teenager’s life,” Clark says. “So that they know they’re being watched and how they drive is going to matter.
“As a parent, you have to decide what logical consequences are there if it turns out your teen is driving like he thinks he’s in NASCAR instead of on public roads.
“But these technologies are so much more accurate than they were in the original experiment 17 years ago. And you do have a real sense about how you’re driving or how somebody else is driving.”
Pros and Cons of Auto Insurance Monitoring in Your Car
Installing one of these devices in your vehicle isn’t an upside-only proposition.
One of the biggest downsides is that all this data is getting recorded. And it can legally be used against you later in case of an accident, for example.
The insurance company also is recording where you are and when you’re there any time you’re driving.
It’s also technically possible that your premiums could get more expensive if you’re a bad driver. But you usually get an automatic discount just by installing the driving app. And rates can go down from there if you’re driving well.
When auto insurance companies first introduced monitoring, some of the telemetries received criticism and seemed to be wonky. That’s no longer the case, Clark says. And these devices, though you sacrifice privacy, can make you a safer driver through forced accountability or detailed feedback.
“You might be shocked as a long-time driver the habits you or I may have developed that make us more of a danger on the roads than we realize,” Clark says. “And so there is an actual safety value for any of us, and the invasion of privacy, with these systems.”
Although auto insurance monitors aren’t perfect, they often save you money. And they can help you or your family member drive safer.
For many, it’s worth giving up some privacy for those dual outcomes. But that’s a choice you’ll have to make for yourself.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.