New car technology is sending more data to insurance companies, and that information is starting to significantly affect premiums. During a CNN interview with Kasie Hunt, New York Times reporter Kashmir Hill explained the details of this emerging trend.
The data collected by modern vehicles provides insurers with unprecedented insights into driver behavior. This includes information on speed, braking habits, acceleration, and even the time of day a vehicle is operated. This data driven approach allows premiums to be tied more accurately to an individual’s actual driving habits. However, it also raises questions about privacy and the fairness of these new, more detailed data.
Hill discussed how this information allows insurance companies to fine tune their risk assessments, and thereby tailor premiums. If a driver consistently demonstrates safe behavior, they may receive lower premiums. Conversely, drivers whose data shows risky behaviors are exposed to much higher rates.
