Discount Driving Apps: Are They Worth It?
It seems like a new safe driving app comes out every day promising big discounts on insurance rates. It’s important to understand that a discount isn’t guaranteed and there are a multitude of other factors that determine rates such as bankruptcy, number of prior insurance claims, and even your credit score. Driving apps also raise the very serious question of privacy.
A driving app collects and records your driving habits that include phone usage, braking and acceleration, cornering, swerving, and speed. That data is analyzed to determine a driving score that may or may not result in a discount. The information is collected from your phone through multiple avenues.
In the past, insurance companies relied on criteria such as age, gender, marital status, distance driven to work and geographic area to determine rates. Insurance companies assert that driving apps are excellent predictors of how likely a person is to be a safe driver and can actually teach individuals to be safer drivers.
Some companies give motorists a 10 percent discount just for signing up, with the potential of future discounts of up to 30 percent. Everyone wants to save money, but many argue that using a safe driving app isn’t worth giving up their privacy. They’re also concerned that in multiple driver households, one person’s driving can counteract another’s efforts.
With a safe driving app, insurance companies will know exactly where you go, when you go, the route you take, and how often. Once that data has been collected, there’s no going back. The information can follow drivers from company to company. If you change jobs and have a longer commute, it will affect rates.
Data breaches are a constant risk and the app provides a lot more information than your driving habits. It reveals who you’re associating with, where you live, the events you attend, and where you drive to shop. All of that data is a goldmine for companies and marketers with the potential for insurance agencies to make billions if data is sold to third-parties.
Before using a safe driving app, individuals should ask their agent exactly how each bit of data collected will affect their rates, if the company will sell or share their data and with what entities, and if they can refuse to have their data shared without penalties. Monitoring apps aren’t mandatory, but present a concern of which drivers should be aware to preserve their privacy.
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