NAMIC Questions “Black Box” Laws in N.D., Other States

Provisions in laws regulating event data recorders (EDRs or auto “black boxes”) could negatively impact the underwriting prerogatives of auto insurers, the National Association of Mutual Insurance Companies (NAMIC) has concluded in a new report to its member companies.

In its latest Issue brief, entitled “Regulating Event Data Recorders: How Should Insurers React to New State Laws?,” NAMIC notes that North Dakota’s new “black box” law contains a provision that prohibits an insurer from using EDR data as a condition for setting rates.

While only a handful of companies have tested the concept of “miles-driven” auto policies, the brief suggests that placing the North Dakota provision in future EDR bills would hinder an insurer’s ability to offer “miles-driven” policies if, and when, they become more commonplace.

In addition to North Dakota law, the brief also analyzed EDR laws enacted this year in Arkansas (Senate Bill 51), Nevada (Assembly Bill 315) and Texas (House Bill 160). It also looked at California’s law, Assembly Bill 213, which became law in 2003.

Authored by NAMIC’s State Affairs Manager-Southeastern Region, David Reddick, Ph.D., the brief also observes that as more EDR bills are introduced around the country, the battle is most likely to be fought over how a balance can be struck between the privacy rights of individual vehicle owners, who own the EDR data, and the rights of society as a whole. The most contentious part of this privacy debate will be whether data gleaned from EDR devices can be used as evidence in civil and criminal cases.

A recent survey of legal cases found that since 2000, judges in at least 14 states have upheld the right to use data from EDR devices as evidence, mostly in criminal cases.

The brief concludes by arguing that state policymakers will need to be made aware of these facts, as well as the insurer’s contractual duty to defend its policyholders and the policyholder’s contractual duty to cooperate with its insurer in the defense of claims, whenever EDR legislation is considered in the future.

This issue brief can be downloaded from NAMIC’s web site, NAMIC Online at