A bill in the Maryland Senate seeks to limit how insurers use automobile telematics data in underwriting, expand disclosure requirements, and restrict data collection through telematics systems.
State Sen. Alonzo Washington, who introduced the bill, said it aims to prevent large rate increases driven by telematics and protect consumer privacy.
Senate Bill 984 would bar insurers from using telematics data to determine premiums for the vehicle it was collected from. It would also prevent carriers from canceling, nonrenewing, or refusing to underwrite policies based on telematics data.
The bill requires insurers to inform policyholders if telematics data is used. It also directs the insurance commissioner to define what data can be collected and how much can be gathered. The commissioner would have the authority to audit telematics programs to ensure rates are set using actuarial methods without bias.
Insurers would also need to create an appeals process for drivers to dispute or correct inaccurate data. If enacted, the law would take effect on Oct. 1.
Washington said more insurers are adopting telematics programs, raising concerns about privacy, transparency, and discrimination. A Consumer Federation of America survey found nearly 70% of Americans would not install a telematics device that tracks driving behavior or location.
It is time to prioritize the rights of consumers over the profits of insurance companies and tackle the unaffordable insurance rates faced by our residents
Despite this, Washington said insurers collect driving data without policyholders’ consent and use it in ways that disproportionately impact certain communities. He called for prioritizing consumer rights over insurance company profits and addressing high insurance costs.
The American Property Casualty Insurance Association supports giving drivers the choice to opt into telematics programs. Jon Ward, APCIA’s vice president of public affairs, said telematics car insurance can help drivers lower premiums by promoting safer driving and reducing accidents.
Telematics have been shown to help drivers reduce their insurance premiums by incentivizing safer driving. This also reduces the likelihood of traffic accidents.
In November 2024, the Maryland Insurance Administration proposed new notification rules for premium increases linked to telematics data. The industry opposed the rule, arguing it would lead to a 33% rise in required premium increase notices.
