Report: Cyber Criminals Selling Data About 21 Million German Consumers' Bank Accounts
You Are A Chump (Mugged By Wall Street, Round 2)

Would You Trade Privacy For Auto Insurance Discounts?

Last week, I mailed to my insurance agent a form for the low-mileage discount. My wife and i drive less than 5,000 miles monthly yearly since I use mass-transit to commute to work. The form required me to disclose the car's odometer and to provide an explanation why we expect to drive less than previously.

I was comfortable with the form my insurance agent required. Then, I saw the MSNBC video below. The new proposed methods by insurance companies would required consumers to disclose far more than your mileage. a GPS device can track (and send to the recipient) your mileage plus everywhere you drive to. A smart recipient could compute your highway speed and issue speeding tickets accordingly. that's a lot of data to provide just for an insurance discount this year, which the insurance company could eliminate next year.

Plus, a data breach at an insurance company would expose far more data to identity thieves and criminals. Data breaches happen at insurance companies:*

  • April 2006: Progressive Casualty Insurance
  • April 2006: Aetna: 38,000 records exposed
  • June 2006: AIG: 930,000 records exposed
  • June 2006: Allstate: 2,700 records exposed
  • July 2006; Sentry Insurance, 112,270 records exposed
  • December 2006: Aetna, Nationwide, and Wellpoint via a vendor: 172,000 records exposed
  • October 2007; West Virginia Public Employees Insurance Agency: 200,000 records
  • March 2008: Sterling Insurance & Associates: undisclosed
  • May 2008: BB&T Insurance: undisclosed
  • June 2008: Texas Insurance Claims Service: unknown
  • September 2008: State Farm: 137 records exposed

Would you trade privacy for an auto insurance discount? Watch the following:

*Source: Privacy Rights Clearinghouse, Chronology of Data Breaches

Comments

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Ken

It is a trade off.... if you have nothing to hide, you will do it and pay less premium. If you drive fast or reckless you won't do it. Very plain and simple. Underwriting helps to determine the good risks and price accordingly. No surprises here. Its not like big brother is watching, you agreed to this up front to get a better rate.

Ken

Based on the title of this blog.... you are way off. Kind of like getting into a boxing ring and wonder why you are getting punched. Duh!

George

Ken:

Thanks for your comments. I started this blog when IBM exposed my sensitive personal data during a data breach. (Read the About page.) IBM's carelessness inconvenienced me and many other consumers. That event woke me up to some of the issues. Recent events on Wall Street with the financial firm bailouts and mismanagement (CDOs) have reinforced that feeling of being mugged.

While writing this blog, I've learned a lot about identity theft, data breaches, the data companies archive about consumers (and don't tell us), that too many states still don't require companies to notify consumers when they lose their sensitive personal data, and how the constantly changing laws keep the "tilt in the playing field" towards the interests of companies and away from the interests of consumers. The FTC seems bent on helping companies without balalncing the needs of consumers.

There has to be a better balance.

Read a few more posts before passing judgment. Try reading the Experian and Bank of NY Mellon breach posts. A lot of other consumers feel "mugged" too -- by poorly designed credit monitoring services.

Or read my posts about the continual data breaches by companies that don't implement adequate data security methods or employee training. Or read the post about the consequences when another person uses your Social Security Number. (You can find these posts via the tag cloud or the Ligit search.) These examples all add to consumers feeling mugged.

George
Editor
http://ivebeenmugged.typepad.com

Ken

I agree there have been a lot of data breaches, no question. I am just saying that an insurance product that offers lower rates for agreeing to give up some privacy is a personal choice. I myself would not do it since I travel over the speed limit 70% of the time.

I believe the 41 states now have laws reguarding notification of data breaches so it is growing.

No question that consumers are getting mugged.... just this insurance product is not a case of that.

Rafal Los

Time out! That ridiculous argument that "if you have nothing to hide you're OK" is crap. I don't necessarily do anything wrong but the idea that someone is looking over my every move should chill me to the bone, irrespective of the pennies it saves me on auto insurance. Yes - we voluntarily give up our privacy (see: credit cards, iPass/EasyPass, library cards, store "preferred" cards, etc) but there are limits.

arizona auto insurance

Privacy is a huge issue today. Any company would cringe to be in the news today over a story involving a lack on consumer privacy.

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