Wait, What? How is that helpful?
It’s not, but you may be paying more for car insurance than you should. Why? Read on to find out.
I Hate Insurance
I just recently sent in a check (well, not really, I use autopay to save 5%) to pay my annual car, home and umbrella insurance for the year.
This past year, we used our car insurance for the first time since I can remember. In 2009, we got a free roof because of hail damage, but have not gotten any real benefit from our home insurance since. Umbrella insurance covers us for a lawsuit in case Rosco is a bad dog or there is an accident involving us, our cars or property. Umbrella insurance is important because in a lawsuit, the insurance company will provide the lawyers because it’s their money at stake.
My wife and I are retired so we also pay our own medical and dental insurance.
Insurance is quite a large chunk of our annual budget. We can’t afford not to have it, but the benefits we receive seem quite minimal.
So yes, I hate insurance, but I know I need it.
Insurance Shopping
Every 2 years or so, I shop insurance rates. This is easy because many companies provide quotes online. Insurance agencies, who are dying for our business, are happy to run quotes against all of the providers in their network. For years I was dead set against using an agent. I always assumed it would be cheaper to go direct. In 2021, I got a quote from an agent, just for kicks, and I saved over $900 per year.
Auto Insurance
Auto insurance in particular seems to have a wide variety in rates. I imagine there must be something similar to a credit score that the insurers use to assess the risk of taking us on as a client. We know they look at our vehicle’s value, our driving history, where we garage our vehicle, our age and other factors to determine our rate, but what else is in there?
We provide most of this info to the insurer when we apply for a policy, or request a quote. I’m OK with this. If they ask something I’m not willing to tell, I move on to the next insurer.
Big Brother is Watching
Today I read a scary article, here, called Car insurance companies quietly use these apps to hike your rates.
How many of us use Gas Buddy to find the cheapest gas nearby? My uncle uses Life360 on his grandkid’s phones to keep an eye on them. MyRadar is a popular weather app. Most of us wouldn’t think twice about downloading these apps to our phones.
According to the article, These apps provide data about their users’ driving habits to an analytics company called Arity, which is owned by Allstate. Arity creates a “driving score” for users based on how often they speed, slam their brakes, or are distracted by their phones while driving.
Scary, Right?
If you’re not shocked by this, you should be. While the data brokers and app providers will claim that we’ve agreed to share this data most of us don’t read the pages of terms and conditions on these apps, we just click accept. For a funny but dark take on this, catch the Black Mirror episode Joan is Awful on Netflix.
In a prior post, I talked about data brokers and their role in selling personal information about us. While we like to think this is legitimate business where a company is buying our data in order to provide more effective advertising to us, what’s to prevent a company that we do business with from buying data about us to gain advantage?
Clearly auto insurance companies are doing this without our knowledge. What’s to prevent a criminal from buying our location data and using it to determine patterns of where we go, when our home is empty…you get the idea. And we may think that these data brokers wouldn’t sell to criminals, but how would they know? Most transactions are done online these days. They don’t see someone like this in their lobby.
What Can We Do?
The most important thing to do is to be aware and concerned. Our information is valuable and it can be used against us. My wife won’t download any apps to her iPhone. She’s turned off location services and she keeps bluetooth and wifi off unless she’s actively using them. She manages to live quite happily despite these restrictions.
I’m not quite as diligent. But I’ve recently gone through and tightened up my security settings on my iPhone. I’ve reviewed what apps have access to my data and location. I’ve deleted some non-critical apps.
Your Car is Watching You
As much as your phone is watching you and ratting you out, your car may be doing this as well. My car has a number of options that allow it to notify me when service is due, it can create a trip profile for me, and can do lots of other fancy stuff. Once I’ve agreed to use these features, BMW is watching everything I do. And they may be providing this data to others – who knows?
There are right to repair bills active in several states that require our vehicle’s data to be shared with third parties as well as the automaker so that the automaker does not have a monopoly on providing service to us. I’m all for the small shops, but I’m not sure I want my vehicles data traveling around the internet for anyone who’s interested.
Wrap-Up
Sorry to scare you, but it is a scary topic.
As the article discusses (you didn’t read to the end did you?), just like our credit score, we should be aware of this data usage and we should have the ability to review it and challenge discrepancies. If legitimate companies have this information and are using it in negotiations with us, or in an assessment of us, we should be aware.
Illegitimate uses are a little more of a grey area. Regulating criminals is likely to be a more difficult process.
Because we have no control, our best defense is to make sure our data doesn’t get out there in the first place. This means tightening up security settings on your phone. We may also want to eliminate apps that aren’t essential, and we may want to be more careful about the info we share on social media, or with companies we deal with online, or anywhere we travel on the internet.
Think about what info your sharing, with whom your sharing, and how that info could be used against you.
Don’t forget your vehicle. Most vehicles are tracking us in some way. Whether that info is kept on the vehicle, or is sent out over the internet, it may be time to look into the settings menu on the vehicle and lock it down.
So dust off your tinfoil hat and stay safe.