Should drivers be monitored for car insurance purposes? - CalMatters

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An aerial view of the Yolo causeway highway connecting Sacramento and Davis on July 12, 2024. Photo by Fred Greaves for CalMatters

In summary

AB 311 would change California insurance law by allowing drivers to opt in to being tracked through telematics, which transmits data to insurance companies.

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A bill to allow insurance companies to monitor California drivers’ behavior in exchange for potential discounts on their premiums would change the state’s longstanding insurance law, drawing opposition from the Insurance Department as well as consumer and privacy advocates.

Assembly Bill 311 would let insurance companies use telematics — technology installed in vehicles that allows them to transmit information such as location, speed, braking force, swerving and more — when setting rates for drivers who choose to allow themselves to be tracked.

California is the only state in the nation that does not allow insurers to use telematics in setting rates. State law requires insurers to prioritize safety record, miles driven and driving experience as the main factors when they set drivers’ premiums. The bill would let drivers choose to use telematics data to establish their driving records in addition to what their Department of Motor Vehicles records show. Telematics data is collected by smartphone app, systems embedded in vehicles or other connected technology.

Supporters say the legislation would make streets and highways safer by encouraging better driving, while opponents worry about privacy, lack of transparency and possible bias in insurance pricing.

Kellie Montalvo, a parent whose son died after a distracted driver hit him, testified before the Senate Standing Committee on Insurance on June 24. She said her son Benjamin, 21, was riding his bike in 2020 when he was hit by a driver who had been texting while driving. She said the driver had a record of “speeding tickets, prior crashes and this was her fourth hit-and-run.”

“I spend many sleepless nights wondering if she had been stopped at any point prior to that horrific night, would my beautiful son be here today,” Montalvo said, her voice breaking. She urged lawmakers to pass the bill, saying it will save lives.

Other witnesses, also clearly emotional, expressed support for the bill as they carried enlarged photos of the loved ones they’ve lost because of crashes.

The bill’s author, Assemblymember Tina McKinnor, a Democrat from Inglewood, said at the committee hearing that she has lost three friends in vehicle crashes in the past several years. She called telematics a tool to help make streets safer, saying her bill would “incentivize safer, good driving behavior.”

Safer Streets for Everyone, a nonprofit organization advocating for road safety, co-sponsored the legislation. The group’s founder and executive director, Damian Kevitt, is a cyclist who was hit by a car and lost his leg. He testified before the committee, citing a couple of studies that show drivers improved their behavior — including reducing their use of mobile phones — while behind the wheel when financial rewards were involved.

Both studies were backed by the insurance industry. None of the proponents who testified recently before two Senate committees advanced the bill mentioned any independent studies around whether telematics has helped improve safety.

Other supporters of the bill include several road-safety coalitions and bicycle associations from around the state.

Insurance department’s concerns

The state’s insurance department is opposed to the bill, saying the legislation is not compatible with California insurance law, Proposition 103. The law came out of a ballot proposition written by Harvey Rosenfield, the founder of consumer advocacy group Consumer Watchdog, in response to rising car and home insurance premiums almost four decades ago. It was approved by 51% of the state’s voters in 1988 and includes a mandate for insurance companies to give “good drivers” 20% discounts. (Some drivers also receive discounts for low mileage — it’s a form of monitoring that’s OK under Prop. 103 because miles driven is an allowed factor in rate-setting.)

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