Mobile apps data influence car insurance rates

"Apps Data Influence"

Car insurance companies are now heavily relying on data gathered from customers’ mobile applications to set insurance rates. This approach, which revolves around tracking driving behaviors, moves away from traditional premium-setting methods predominantly based on demographic information. This modern strategy results in better-tailored policies and promotes safer driving.

The use of data-gathering apps, including Life360, MyRadar, and Gas Buddy, has surged. These apps provide valuable data to Arity, a company affiliated with Allstate. From location sharing and real-time weather updates to finding affordable gas prices, these apps collect various essential data about a user’s driving habits.

Arity employs this data to gauge risk and allocate ‘driving scores.’ These scores, divided into ten risk categories, reflect individual driving behaviors. Risky behaviors result in higher scores and consequently higher insurance premiums.

Utilizing mobile app data for car insurance

This approach encourages safer driving habits and potentially lower premium rates.

However, this data collection process has raised privacy issues. Critics argue that users often unknowingly consent to data sharing and are unaware of how their data is being used. The use of ambiguous language in privacy agreements has drawn criticism as well.

Arity boasts of having over 40 million drivers in the U.S., contributing data continuously via mobile apps and connected cars. This massive data helps the company offer insights crucial to several sectors, including insurance and shared mobility. By analyzing real-time and past driving data, Arity helps businesses make informed decisions, improve road safety, and provide a more personalized customer experience.

Despite these advancements, there’s a growing concern about the lack of legislation protecting consumer privacy in the US, particularly following Mars’s revelations that car manufacturers were sharing customer data with insurance firms. This situation calls for a more transparent and protective approach to handling users’ data.