Uptick in homeowners "telematics" raises serious privacy concerns

Four major homeowners insurers have now announced partnerships with home automation units that promise policy discounts in exchange for personal data.

Insurance News

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A decade ago, telematics devices revolutionized a significant portion of the auto insurance industry. Today, the usage-based insurance model is coming to homeowners policies, and raising serious questions about privacy along the way.

In the past year, four leading home insurance companies — American Family Insurance, Liberty Mutual, State Farm and USAA — have announced deals with companies that provide "smart" products for homes. These devices monitor and control certain of the home's major appliances and in exchange for using them, policyholders receive a discount on their premium. The insurance companies then receive a large amount of data on how their customers live.

"These are double-edged products," Bob Hunter, insurance director for the Consumer Federation of America and a former Texas insurance commissioner, told the Chicago Tribune. "If properly controlled for privacy and only installed with the policyholder's permission and total transparency, they can make a home safer and reduce the likelihood of death and destruction, but without strict protections, these could be a threat to a family's privacy and intimacy."

Such is the access these devices have that Canary, one of State Farm's partners, once recorded a baby's first steps. This is no small worry to consumer advocates concerned over privacy.
 

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