Saturday, September 1, 2012

Driver, the prosecution of insurers sparks privacy debate

California turns into a battlefield for the technology, which allows track car insurers handling their customers and offer them lower premiums, but that advocates as an excessive interference with serious consequences reject privacy.

Insurance companies are increasingly small boxes customers install cars that where they drive everything from how much customers drive to their average speeds to monitor.

Auto insurer progressive Corp., leads the market for so-called usage based insurance, estimates that about enough drive 70 percent of the people who sign up for the program well to get a discount.

But privacy advocates say that the lower premiums, not the trade-offs are value, because the data could, unexpected purposes are used such as punishment of the driver, to visit the unsafe areas. This argument holds rule with the California Department of insurance, which is opposed, the development of technology.

"There are, although occasional discussions with certain insurers and providers the Department no immediate plans, usage-based evaluation factors that initiate has", said Pat McConahay, a spokeswoman for the California Department of insurance, in an e-Mail.

The State opposition is a problem for insurers. Nearly 10 percent of the cars on the road in the United States are in California and almost 13 per cent of all car insurance companies are there written (more than twice next largest state), making it an important market for the highly fragmented industry.

"We have tried for quite some time, some movement," said Richard Hutchinson, general manager of the usage-based insurance program with progressive, in a recent interview. "It may in fact require the legislature."

In California it is complicated, insurance rules change. California voters has a law, known as prop 103 1989 strict setting rules for how car insurance be priced could be. At the time only a few imagine a day when insurers could insert a small box into their cars and track how, when and where they go.

It looks like the only metric that the State allows to track is miles hazard-admittedly a crucial component of any usage-based program, but not the only factor for most of them. Most programs should you distances driven, stop and restart of host of other variable speeds and times of day driven.

Insurance Commissioner of the State has at least two concerns about the technology: questions of privacy and fears that insurance be punish drivers for factors beyond their control, such as charge more for a person, Beruf forces them to drive at night.

Legislators could overrule the Commissioner, but it would be difficult. Would have to prop 103 to change, to the legislature the original objectives of the proposition sponsored and passed every Bill then show that Bill is a with a two-thirds majority, all but hopeless task in the fractious California Assembly and Senate.

Already before 10 years sound privacy advocates alerts over the misuse of vehicle tracking data. The Electronic Frontier Foundation, focuses itself, law, the driver, has aggressively against changes to California the prosecution would allow on digital privacy issues.

"There is real danger, that this information would be used not only to examine the political or connecting lines of the rider, but also to charge more if you drive and Park in neighborhoods with high vehicle theft and crime rates", said the group in a 2009 statement.

Insurers could also "Associate your health insurance rates with location data that shows your lunch break trips to McDonald's," the group added.

These may legitimate concerns, but many Americans seem either ignored or discounted the risks. At least eight of the country's ten car insurers have a type of program, full roll-out or in studies.

Many customers end up with lower premiums-most insurers promise savings of up to 30 percent. And drivers can be ready, settle for even less. A recent Deloitte survey found that 52 percent of insured consumers 20 percent or less would accept a discount, to install the necessary hardware.

A spokesman for Ron Calderon, the Chairman of the Insurance Committee in the Senate, said that his Office allow not aware any planned legislation was usage-based insurance in California, although he supported the idea.

An industry source said, Department speak insurers and their representatives at the insurance and that officials are "open to listen to input from the industry", but no actual progress is pretty far away.

Copyright 2011 Thomson Reuters.

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