Data collection far exceeds the public’s understanding
“Most people have no idea how much of their data is being collected,” Yosi Yahoudai, co-founder and managing partner of J&Y Law, a Los Angeles-based personal injury firm, told Insurify. “With telematics, we’re talking real-time speed, braking, location — even phone use behind the wheel. That data is used to calculate premiums, assign fault in accidents, and, in some cases, deny claims outright. So yes, it’s changing the risk landscape, but it doesn’t always favor the consumer.”
Yahoudai said he and his colleagues are seeing car-crash cases in which data becomes a key witness. Sometimes, telematics data helps prove a driver’s side of the story, and sometimes data works against the driver.
Insurers in many U.S. states already use telematics data as part of usage-based car insurance. Some may use telematics data to justify rate increases or coverage decisions, something consumer advocates have fought. California and New York, for example, prohibited insurers from using electronic data when considering driver premiums.
“Policyholders increasingly challenge these decisions based on telematics on the grounds they lack transparency or that the insurer failed to investigate other factors that could explain anomalous telematics readings reasonably,” said Mark S. Davis, founding partner at Davis Levin Livingston, a Honolulu-based plaintiff’s attorney firm. “As telematics becomes more embedded, courts will likely see a surge in disputes over what constitutes a reasonable basis for rating adjustments, cancellations, or non-renewals.”
Davis says instead of relying solely on police reports or claimant statements, insurers may pull stored telematics records to reconstruct accidents — when speed, braking patterns, and GPS data can paint a detailed picture of events.
“For attorneys handling bad-faith cases, this raises issues about the adequacy of an insurer’s investigation,” he said. “Was all relevant evidence considered? Was the telematics data properly interpreted within the context of the accident? These questions will become courtroom flashpoints.”
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