May 27, 2014
Contact: Matt Anderson, 212-709-1691
SUPERINTENDENT LAWSKY URGES AUTO INSURERS TO ADOPT 'TELEMATICS' PROGRAMS TO HELP DRIVERS SAVE MONEY, SAVE LIVES
Usage-Based Insurance Programs Provide Discounts to Consumers with Safe Driving Habits
Benjamin M. Lawsky, Superintendent of Financial Services, today issued a bulletin to all New York auto insurers encouraging them to adopt "usage-based insurance" (UBI) programs. Under these voluntary programs, consumers can install "telematics" devices in their cars that – with the consumers' consent – catalog data on their driving habits and provide discounts to those found to be more careful drivers.
Superintendent Lawsky said, "Telematics programs can be a win-win for insurers and drivers. They can save policyholder money and save lives by making our roads safer. We encourage all New York auto insurers to submit plans to our Department making use of this innovative technology."
A recent innovation known as a "telematics" device, when installed in a driver's vehicle, can record and upload various forms of data pertaining to driving patterns, such as a driver’s acceleration and braking patterns, the number of miles a vehicle has driven, and the time of day a driver drives. Insurers can use the data to provide discounts to already careful drivers, who are less expensive to insure. At the same time, UBI programs give less cautious drivers the incentive to drive more carefully, which can help reduce auto accidents. As more customers gain better driving habits, an insurer can experience lower overall costs, which could lead to lower auto insurance premiums statewide.
The Department of Financial Services (DFS) is committed to the protection of consumer privacy. Therefore, DFS has approved UBI programs only where they are offered to consumers on a voluntary basis.
The precise contours of existing UBI programs vary. Some require installation of a telematics device for a set amount of time in exchange for a fixed discount; others require such installation for the duration of a policy period in exchange for a periodic rate adjustment.
One innovative telematics program that the DFS has already approved at Esurance helps parents prevent their teenagers from texting and driving. Under Esurance’s voluntary program, policyholders may install an in-car device into their teen's car that, in conjunction with an Esurance app installed on their teen driver's phone, can limit the use of texts, emails, applications, and phone calls while driving (with the exception of 911). The device can also catalog driving behavior, including speeding, hard braking, fast acceleration, and other activities.
DFS has also approved telematics programs offered by a half-dozen other insurers including, Allstate, Allianz, the Hartford, Progressive, State Farm, and Utica National. Programs from additional insurers are currently under consideration.
To view a copy of the bulletin Superintendent Lawsky issued today to all New York auto insurers on telematics, please visit, link.