Ford, State Farm to Offer Car Insurance That Saves Money but Tracks Your Every Move
As usage-based insurance grows in popularity, questions regarding what it does with our data have arisen.
Car insurance is one of those expenses that is certainly annoying to pay if nothing ever happens, but when it does, you’ll most likely be glad you had it. Regardless, we’re always looking to save money on our car insurance, and many switch companies every now and then in an effort to do so. Another relatively new alternative is usage-based insurance, which uses either a device placed in a vehicle or a vehicle’s connected vehicle technology to track the way you drive and how many miles you cover, then charges you accordingly. Now, a new UBI partnership between Ford and State Farm is offering this to customers in a different way, one that raises some concerns about data collection.
Unlike traditional UBI insurance plans, State Farm’s new Drive Safe & Save plan is only available on Ford vehicles from the 2020 and up model years that are fitted with its latest connected vehicle technology, SYNC 4, and over-the-air update capability. Traditionally, insurance companies would give customers a device they can place in their vehicle to record data, one that can be easily removed, or via a smartphone app. That obviously isn’t the case with this new plan, which means that it’s continuously monitoring and reporting on your rates of acceleration and braking, speeding, cornering, the time of day your drive, your mileage, or even if you’re using your phone while driving.
For some, this may not be a big deal, and in essence, perhaps even teach them to drive safer while also saving 10-15 percent on their insurance, as State Farm claims. However, not everyone will receive a discount. Prior studies have found that only around 48 percent of those that opt into UBI programs actually save money, while 30 percent see no changes, and 18 percent actually received higher rates after opting in.
Perhaps the bigger concern is sharing even more personal data with your insurance company, however, and that’s a valid one for certain. In fact, the Consumer Federation of America (CFA) published a report last year pointing out some serious flaws in existing UBI programs. The report also urges states to regulate them and add consumer protections that would make the process of data collection more transparent and prevent them from selling, renting or sharing telematics data for non-insurance purposes, as well as giving consumers access to that data so they can see what’s being collected.
For now, UBI plans are a bit of a mystery, even as they grow in popularity. Ford and State Farm’s Drive Safe & Save plan will launch in Alaska, Idaho, Montana, and Oregon, followed by other states at a later time, but it won’t be available in California, Massachusetts, and Rhode Island, where it’s forbidden by law. And while enthusiasts like us obviously don’t want anyone tracking our driving behavior, that fact alone should at least prompt everyone to do a bit more research into what UBI insurance plans do with our data besides use it to set rates.
Photos: Ford
Join the Ford Truck Enthusiasts forums now!
