John Davisson, senior counsel and director of litigation at the Electronic Privacy Information Center, advises consumers to thoroughly review their insurer’s website before enrolling in a telematics program. This includes understanding which data points are collected and how that data is used. Given the complexity of legal texts in data privacy agreements, Davisson suggests calling the insurer for specific clarifications.

“I’m a privacy attorney who looks at these policies all the time, and oftentimes even I have a fuzzy understanding of what’s in these documents,” he said. “What you want to find out is that the company collecting the data is taking as little of it as possible in order to provide a service. That’s as true of an insurance company as it is of any company that uses your data.”

Davisson also warns about potential risks associated with data collection. “There is always a risk that your data could be siphoned off and made available to other companies, and we see such a steady drumbeat of stories about data breaches,” he says.

Another concern raised by Davisson relates to how insurers use risk models based on location. “You might be as good a driver as someone the next town over, but if the insurer’s risk model assigns you to a higher risk category based on where you live, the difference in insurance premiums could be unfair,” he says.

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