July 30, 2011

The Legality Of Tracking Devices Being Used For Car Insurance Discounts

When it comes to car insurance discounts, drivers across the country are looking for ways to get the most out of their insurance dollars on a monthly and yearly basis. Many companies are now offering a host of discount options to keep drivers over the long term, and these include things like lower rates for good driving records or for having more than vehicle insured with the company. Some offer variable coverage depending on the needs of drivers, or the ability to increase or decrease the deductible as needed on a policy. A new trend is for insurance companies to offer a discounted rate if a policyholder is willing to install a car tracking device in their vehicle. These small car tracking devices are plugged into on-board diagnostic ports in a car, and then used to tirelessly transmit data each day to an insurance company.

They are not mandatory to use, and no driver can be forced to use one or risk losing their coverage - these trackers are a new idea floated by the insurance company in an effort to get an accurate reading on miles driven and how cars are being driven on roadways. Insurance companies running these tracking device projects claim that they are only keeping a tally of how far a car is being driven and what time of day it is being used. If a car is speeding, insurance companies say that they will not inform police about a driver's indiscretion.

A question that has now arisen about this type of car insurance discounts is whether or not such tracking devices are legal. In short, the answer is yes. A consumer must agree to the insurance company placing the device in their car, and do so in writing. This agreement should also cover how the data collected will be used - the idea being that the few miles driven by a consumer, the lower their rates will be. Legally, owners can choose to allow these devices to be placed in their cars, but concerns still remain about what is being done with the data once it is collected, and exactly how much data is being collected. Many insurance companies claim their devices do not have GPS locators in them, but there is a concern that eventually these devices will be used to track drivers under the guise of "safety".

Currently, car tracking devices are a way to save on insurance, if a driver is comfortable having their insurance company along with them for the ride every time they drive their car. There are no legal bars to using this kind of technology, but consumers must be aware of potential ill use.