If you picked up a copy of the Honolulu Star-Advertiser last week, you might have seen an ad wrapped around the front of the paper for the Akamai Rater, a new insurance product from DTRIC Insurance.
The ad came one day after the state put out a press release about the same product, which determines your insurance rate by tracking how you drive.
But one thing the publicity over the new device doesn’t tell you — similar gadgets are under fire on the mainland for privacy issues.
The press release announced the state insurance commissioner had approved of the device, describing the Akamai Rater as a program “geared toward saving Hawaii’s safe drivers on their auto insurance.” It called DTRIC the “first insurer in Hawaii” to sell a so-called pay-as-you-drive device.
DTRIC’s ad also used the words, “First in Hawaii,” and said that the device would provide “huge savings on your auto insurance.”
On the face of it, the ad and the state’s press release had the ring of a well-timed public relations campaign.
But Hawaii Insurance Commissioner Gordon Ito told Civil Beat that the press release was not an endorsement.
“We’re not promoting the product,” Ito said. “We want to tell the public that this new device is available.”
Ito said there have been other cases when the Department of Insurance has informed the public of new products.
But a review of all the department’s press releases posted on their website since Ito became the commissioner in 2010 shows that this is the first press release in at least two years in which the state agency has highlighted a particular company’s product.
Civil Beat pointed that out to Ito, and he acknowledged that such announcements are rare.
“From time to time we’ve issued press releases concerning insurance companies entering the market or the availability [of products],” he said.
He cited a 2008 press release under former insurance commissioner J.P. Schmidt’s tenure announcing the approval of a new homeowners hurricane insurance policy from Universal North America Insurance Company.
Ito said the department does not plan to publish additional press releases if other companies begin selling pay-as-you-drive devices.
“The reason we issued the press release is to inform consumers that they could potentially save money,” Ito said. “It’s a new product that’s being offered.”
DTRIC refused Civil Beat’s request for a phone interview about the product’s release.
A device that tracks your every move — at least, when you’re in a car. To some, it’s like Big Brother sitting in the passenger seat.
Lee Tian, a senior staff attorney at the Electronic Frontier Foundation, a California organization that seeks to protect consumer rights in the digital age, said that pay-as-you-drive insurance devices raise a host of questions about privacy and consumer rights.
“The more data it collects, the more privacy issues it creates,” Tian said.
According to the company’s website, the device collects information on “a number of driving variables, including aggressive driving, time of day, excessive speeding, and hard braking.”
Similar devices in California track mileage, potentially motivating consumers to drive less. Tian said that the Hawaii device collects even more information, increasing the potential for abuse.
According to Tian, one way that pay-as-you-drive devices can threaten consumers’ privacy is by tracking their locations.
California regulations prohibit the use of location data for pay-as-you-drive products with few exceptions.
But Ito said Hawaii’s insurance division doesn’t have any extra regulations limiting the kind of information products like the Akamai Rater can collect.
Linh DePledge, vice president & chief marketing officer at DTRIC, confirmed that the device has a “location GPS tracker,” but said that the information is not used in determining insurance rates.
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