You may have come across advertisements for car insurance tracking devices that promise to save you money on your insurance premium. By installing a device in your car or using an app on your phone, your driving habits can be tracked and you can receive rewards for safe driving. However, be aware of the risks that come with using these devices as they could compromise your privacy.

Major car insurance companies in the US offer what’s called a “usage-based insurance program” (UBI), which goes by different names depending on the company. These include Allstate’s Drivewise, State Farm’s Drive Safe and Save, GEICO’s Drive Easy, Progressive’s Snapshot, USAA’s Safe Pilot, Liberty Mutual’s Right Track, Nationwide’s SmartRide, Auto-Owners’ True Ride, Farmer’s Insurance’s Signal.

Despite the risks, many consumers are falling for these marketing ploys. Market projections suggest that up to two-thirds of auto insurance consumers will be enrolled in a UBI program by 2024, allowing their insurance company to collect private information about their driving habits in exchange for a discount. This poses potential risks for those using car insurance tracking devices.

Car insurance companies use various methods to collect data, and the types of data they collect vary from one insurer to another. Typically, data includes phone usage, acceleration, deceleration (hard braking), time of day, and often speed. Some programs last for a few months, while others are continuous. Some insurance companies install car tracking devices directly into the vehicle’s event data recorder, while others use a phone’s data, accelerometer, and GPS information.

As time passes, these programs are increasing in both market share and sophistication. As vehicles and phones become more intelligent and interconnected, insurance companies will likely use the data collected to mitigate the exposure and risk posed by poor drivers. Therefore, data collection will be deemed necessary as long as it can be collected to minimize risks and drive up profits. Thus, we can expect the type and amount of data collected by UBI programs to increase as the capability to collect information also increases.

It is possible that the data collected by UBI programs can be used in criminal and civil legal proceedings, similar to how private corporations are willing to turn over DNA databases to assist criminal prosecutions. Insurance companies will likely be compelled to turn over UBI data to assist criminal prosecutions or to prove a person’s location at a specific time. If you opt for a UBI that utilizes an app, your insurance provider now has access to all of your movements, not just those you make in your vehicle.

You may be thinking that you are safe because you do not break the law, but it is essential to understand that car tracking devices’ data can be used in civil litigation proceedings. If you are pursuing a claim against an at-fault driver and have a UBI installed in your car, the opposing defense counsel could subpoena this information and comb through it to find any data that could potentially pin fault on you. Depending on what is found in your data, this could potentially decrease your liability claim due to comparative negligence or bar you from filing a negligence claim altogether. Hence, if you or your passengers use car tracking devices or have a UBI program installed on their cell phones, that data should be reviewed well in advance of production to opposing counsel.

Knowing how data is collected and potentially used in car accident claims is the first step in protecting yourself. The second step is to retain skilled legal counsel in cases where car tracking devices are installed and could reveal potentially harmful data to your claim.

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