- For years, auto insurers asked hesitant customers to allow them to track their driving.
- The companies have found ways around customer resistance by relying on driving data from other apps.
- Insurance rates, meanwhile, have hit a 50-year high.
Auto insurers have spent years appealing to customers to allow them to track their driving.
Though many surveillance-wary customers have declined, insurers have found a loophole: Monitor people's driving through quiet deals with other apps.
Auto-insurance companies can then use that data to determine how risky a driver is and how much they should pay for insurance.
Car-insurance rates this year have soared to 50-year highs, surpassing inflation and leading to higher premiums and deductibles, Business Insider previously reported.
In a world where everything from a driver's age to local climate events can be used to assess insurance rates, it might sound nice to have one's risk assessed on something you can actually control.
But most families don't realize that some phone apps they use in the background, such as Life360, MyRadar, or GasBuddy, are handing their driving data over to insurers, The New York Times reported.
These apps all rely on driving-analysis technology operated by Arity, an Allstate company that collects data to determine a driving score that can be sold to insurers to "help create future transportation solutions that are smarter and safer," according to Allstate's website, which says Arity has collected "more than a trillion miles of driving data."
The opt-in consent on the apps is vague about what information is shared, the Times reported, so many customers had no idea they were sharing driving data with insurers.
"People today are generating massive amounts of data, and we believe this data has significant potential value for businesses across transportation. Consumers stand to gain big too," Arity's website says, adding that customers can have "greater control to receive rates based on how safely they drive."
In a comment to Business Insider, Arity said that it "partners with mobile app publishers to provide value features, like Crash Detection and fuel efficiency to users who opt-in for those services."
"For the use of personalized auto insurance pricing, consumers must clearly and explicitly opt-in to have Arity create and send a summary of their driving data via the Arity IQ network and consumers can request a copy of this driving report once they opt-in to share their driving data for a personalized insurance quote," the company continued.
In a statement to BI, a Life360 spokesperson said the Times article was "inaccurate and misleading."
"Life360 does not share personally identifiable driving data with insurance companies to influence our members' insurance premiums unless a member explicitly requests that we do so. We require specific, opt-in consent before sharing a member's personal driving data for personalized insurance quotes," the spokesperson said. "There may be companies that share data with insurance companies without the driver's full knowledge or affirmative consent, but Life360 is not one of those."
Update June 12, 2024: This story has been updated to include a comment from Arity and Life360.