California bill would let drivers share telematics data for possible insurance discounts

Assembly Bill 311 would allow California drivers to choose whether insurance companies can use telematics data when calculating their premiums. The data would include location, speed, braking, and other driving behaviors collected through smartphone apps or vehicle systems.

California is currently the only state that bars insurers from using telematics for rate-setting. Existing law requires insurers to base premiums primarily on safety record, miles driven, and driving experience.

Insurance department opposition The state insurance department told lawmakers the bill conflicts with Proposition 103, the 1988 voter-approved measure that mandates discounts for good drivers. Deputy Insurance Commissioner Josephine Figueroa wrote that the legislation creates liability loopholes and shifts regulatory duties to unregulated third-party vendors.

Figueroa also noted that Maryland data from 2023 showed 31 percent of drivers in telematics programs received lower rates, 24 percent saw increases, and 45 percent experienced no change.

Consumer and privacy concerns Consumer Watchdog executive director Carmen Balber testified that auto insurance rates must reflect actual driving history rather than unverified algorithms. She questioned the bill’s fast-track process after it was substantially rewritten and submitted to the Senate on June 10.

The bill’s author, Assemblymember Tina McKinnor, said telematics would encourage safer driving. Kellie Montalvo, whose son was killed by a distracted driver in 2020, urged passage during a June 24 Senate hearing. The Senate insurance committee approved the measure four days after the insurance department’s June 20 letter.