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Consumer Reports and CFA letter calling on auto insurers to make telematics programs more transparent and accountable

Letter from Consumer Reports and the Consumer Federation of America to the top ten auto insurers urging them to make their telematics programs more transparent and accountable.  Telematics programs offer policyholders discounts in exchange for permission to closely monitor their driving through a smartphone app or device installed in their cars.  The letter calls on the insurance companies to be more transparent about the data they collect from telematics customers, the factors they use to rate their driving, and the reasons each of those factors is relevant.

Consumer Reports and CFA sent identical letters to Allstate, AmFam, Farmers, Geico, Liberty Mutual, Nationwide, Progressive, State Farm, Travelers, and USAA.  The letter available for download on this page is the one sent to Allstate.

Consumer Reports and CFA sent the letters on the heels of a new CR investigation that found that the rules for telematics programs can be confusing and opaque. CR found that these programs may penalize people driving to or from a late shift — a group disproportionately made up of Black and Latino workers and low-income people.  The same data that’s used to provide discounts could also be used for marketing, or by a claim adjuster if drivers have an accident.  And the programs can unintentionally encourage people to drive more dangerously, CR’s auto testing experts say — for instance, to avoid penalties for “hard braking,” telematics customers might choose to simply roll through stop signs.