By Laurence Darmiento, LOS ANGELES TIMES
A bill that would have allowed California insurers to track motorists driving habits in exchange for potentially lower rates has come to a dead end.
The Consumer Driving Data Protection Act, (opens in new tab) proposed by Assemblymember Tina S. McKinnor (D-Hawthorne), failed to make it out of the Legislature this week after stiff opposition from consumer and data privacy groups.
The legislation would have permitted insurers to use telematics technology to track speed, braking and other driving habits to establish a motorist’s safety record, a key component in setting individual premiums – as long as a motorist consented.
Currently, the safety record is determined by the Department of Motor Vehicles’ point system, which takes into account moving violations and at-fault accidents.
Telematics had the potential to offer the lowest premiums for drivers with spotty driving records who improved their driving habits, but opponents contended (opens in new tab) it violated Proposition 103, the 1988 initiative that regulates auto rates. The measure requires that drivers with a good DMV driving record get a minimum 20% discount.
Data privacy groups also feared the data collected by third-party telematics companies on behalf of insurers might be disclosed. There was no guarantee that tracking would lower rates.
A study last year (opens in new tab) by the Maryland Insurance Administration found that in 2023, 31.2% of drivers in the state who enrolled in telematics-based insurance experienced a rate decrease, 23.6% saw an increase and 45.2% of rates were unchanged due to telematics ratings factors.
“At the end of the day, it worked out for consumers,” said Carmen Balber, executive director of the Los Angeles advocacy group Consumer Watchdog. (opens in new tab) “It was bad legislation that would have allowed insurance companies and big data to invade people’s cars and privacy, and charge them more for insurance while they were doing it.”
