Revised telematics consumer protection bill introduced in Maryland Senate
The Consumer Federation of America (CFA) is urging the Maryland Senate Finance Committee to pass SB 351, a bill that it says would establish “basic and badly needed” consumer protections for drivers participating in insurance company telematics programs.
Bill sponsor Sen. Alonzo T. Washington (D-District 22) presented the bill to the Senate Finance Committee on Feb. 11. He said it would ensure that telematics-based insurance pricing is transparent, accurate, and accountable with meaningful oversight by the Maryland Insurance Administration (MIA).
Washington added that consumers sign up for the programs to save money; however, a 2025 MIA report shows mixed results, he said.
“There is only a 31% chance that your premium will decrease by using this,” he said. “About 24% saw an increase in their premiums, and about 45% saw no change at all in their car insurance premium. We’re seeing this show up in real consumer harm. …MIA received over 811 consumer complaints in an 18-month period. That was about 12.4% of all the private passenger auto complaints in that timeframe… They complained that the increases were up to 42.5% of their premiums.”
The bill is a revised version of a 2025 bill passed by the Senate. The previous version received an unfavorable report from the House Economic Matters Committee and didn’t move forward.
MIA Commissioner Marie Grant (acting commissioner at the time) told a Senate committee last March that the administration stood behind the bill to regulate how auto insurers use private passenger vehicle telematic systems, including prohibiting data as a basis to set premiums.
Grant said the MIA receives a lot of complaints about limited options to challenge or appeal collected telematics data that the policyholder believes is erroneous.
Washington said he is working with MIA on amendments to the new bill.
In its written testimony, the CFA states that with proper regulation and oversight, telematics/usage-based insurance (UBI) can be beneficial to consumers by more accurately matching insurance rates to risk, promoting safer driving behavior, and reducing insurers’ use of unfair socioeconomic factors, such as credit scores, in auto insurance pricing and underwriting.
“But there are major concerns about accountability and transparency in these programs, so telematics programs demand guardrails including consumer privacy protections, limits on the data that can be collected and how it can be used by insurance companies, and stronger oversight of the algorithms used for pricing and whether other rating factors with less or no connection to driving continue to be used in conjunction with the driving monitoring of telematics programs,” the CFA wrote.
It adds that consumers have voiced concerns about data accuracy and privacy, the type of data collected and how insurers use it, vulnerability to hacks and data breaches, and the use of data in claims processes. They also aren’t sure that telematics programs lead to savings, according to the CFA.
“Currently, Maryland has few safeguards to ensure that these programs help consumers and that consumer data is not misused by insurers,” CFA wrote in a press release. “SB 351 requires insurance companies to establish a clear process by which consumers can correct or appeal data collected by these programs that they believe is incorrect. It also requires the Maryland Insurance Administration [to] adopt regulations to limit the type and amount of data that can be collected by telematics programs in Maryland. Additionally, the Maryland Insurance Administration may require insurance companies to establish and implement governance plans.”
In November, the CFA submitted comments in support of a proposed MIA bulletin that clarifies the requirements insurance companies must follow when utilizing telematics programs.
MIA said the proposed bulletin intends to address several questions that have arisen during complaint investigations related to requirements for telematics programs. It noted that the administration previously issued a bulletin in 2024 as guidance for insurers using telematics programs.
Last June, Arity, a mobility data and analytics company and Allstate subsidiary, said it found a way to offer more transparent UBI data and driving reports to consumers.
At the time, Arity reported that users had to request a copy of their driving reports after signing up for a UBI program or agreeing to share their driving data with one of Arity’s mobile app partners.
“We recognize that this process can be unclear or difficult to navigate, and that not all consumers are aware they even have a driving score,” Arity told Repairer Driven News. “To help bridge this gap, our new D2C [direct to consumer] tool will make it easier for individuals to check whether a driving report exists for them, and view it directly, even before enrolling in a UBI program or agreeing to share it when shopping for insurance. This new tool is designed to bring greater transparency, accessibility, and control to consumers interested in understanding how their driving behavior might impact insurance pricing.”
According to Arity’s recently published guide on the new process, driving scores help consumers better understand their driving behavior data and, for insurers, present “an opportunity to unlock the full potential of telematics programs and grow consumer participation.”
Images
Featured image: The Senate chambers of the historic Maryland Statehouse. (Credit: PhotographyPerspectives)