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Published: May 14, 2024 9 min read

How much do you value privacy? Consumers are looking for ways to save money on auto insurance as premiums rise rapidly, and that's driving more people to consider insurers' (controversial) programs that offer savings if you agree to share driving data from a phone app or an in-vehicle device.

Usage-based insurance (UBI) programs, also known as telematics insurance, have a fairly simple premise: If you can demonstrate that you’re a low-risk driver based on your behavior behind the wheel, you’re rewarded with a lower premium.

With car insurance costs up 22% in the past year, drivers are increasingly shopping around to find the lowest-price option. They're also looking for ways to save with their existing insurers, and telematics insurance discounts could potentially help. But is it worth it, and just how much of data actually gets shared?

The programs typically monitor data that relates to how you drive, when you drive or where you drive — or, some combination of the three, explains Deloitte Principal Matthew Carrier, who consults with insurance clients.

“The industry and certain carriers recognized that this data could allow them to evaluate risk better and better match the price of the insurance for the risk,” Carrier says.

Examples of what’s tracked include hard braking, sharp turns and texting while driving. The programs may also consider your mileage and the routes you take, among other factors indicating the kind of driver you are.

Erica Eversman, president of the Automotive Education and Policy Institute, argues that you’re trading privacy to save money with these programs, and that’s not a deal she’s willing to make.

“I think ​​it is incredibly intrusive. It provides a significant amount of data to insurers, and we don't necessarily know what they are doing with that data and whether they are being responsible with that data,” she says.