“Pay As You Drive” Automobile Insurance: The Need to Guard Personal Privacy


Privacy Rights Clearinghouse and PrivacyActivism agree that a pay-drive plan that offers financial incentives for those who drive infrequently or who may choose to carpool or take public transportation has enormous potential for reducing traffic and protecting the environment. However, we respectfully disagree with the Commissioner’s statements in his August 3, 2009, press release that the regulations protect the privacy of California drivers.

Also, regrettably, neither the Department’s press release nor the amended regulations explain how the privacy of California drivers is protected.

“Pay As You Drive” Automobile Insurance: Comments on the Need to Guard Personal Privacy


On June 18, 2008, PRC and Privacy Activism responded to a call for comments when DOI first considered adopting a pay-drive program.

Our June 2008 comments discuss the serious threats to privacy inherent in a pay-drive program that depends on data gathered by onboard technology. Our concerns extended not only to the kinds of data collected by installed devices but also to the potential and unforeseen secondary uses of collected data. With few exceptions, our concerns about the threats to privacy and potential secondary uses of data remain essentially unchanged from those expressed in June 2008.

“Pay As You Drive” Automobile Insurance: Recommendations for Guarding Personal Privacy


Along with the potential good to come from reduced driving through PAYD insurance, there is a real risk that insurers will base attractive premiums on consumers’ willingness to accept onboard devices that record much more than miles traveled. Depending on the technology used, devices installed on personal automobiles may track speed, location, duration of a trip, acceleration and deceleration, time of day the trip was made, the identity of the driver, use of mobile phones and more. Once installed, a device originally set to track one driving element may be altered to add additional functions.

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