State and federal legislators are rightly concerned with protecting the privacy of their constituents’ financial and medical information, but bills to prevent access to vehicle collision data from Event Data Recorders (EDRs), now under consideration in 10 states, may cause more harm than good, according to the Property Casualty Insurers Association of America (PCI).
“Data from EDRs – commonly referred to as ‘black boxes’ – can help speed up claims processing, prevent fraud and hold down premiums,” said Rey Becker, vice president of PCI. “And while insurers are sensitive to issues of consumer privacy and identity theft, EDRs only record crash-related data – such as how specific vehicle equipment or systems operated right before a collision or triggering event. As such, access to this data by insurers and law enforcement agencies would in no way jeopardize the privacy of protected financial and medical information.”
According to the National Highway Traffic Safety Administration (NHTSA), roughly 15 percent of passenger autos and light trucks now on the road have EDRs, and between 65 percent and 90 percent of new vehicles will be equipped with them by model year 2004. However, an Insurance Research Council survey shows that only about a third of Americans have heard of these devices, and many reportedly misunderstand their true function.
“EDRs can benefit everyone from drivers to traffic and safety-control officials, law enforcement agencies, vehicle manufacturers, repair shops and insurers,” said Becker. “EDR data can help to quickly verify or disprove claimant or witness accounts, and help determine whether alleged injuries are consistent with the nature of the collision. Use of the data can also help insurers to settle cases quickly before costly and time-consuming litigation is initiated. And, by helping insurers reduce their loss adjustment expenses, EDR data helps insurers hold the line on premium increases.”
In 2003, California became the first to address the issue by requiring new vehicle manufacturers to disclose the presence of an EDR to the buyer. NHTSA, PCI and the insurance industry fully support such disclosure. However, PCI opposes the provision of California’s law that restricts access to EDR data without affirmative consent from the vehicle owner or under several other limited conditions.
Many bills to restrict access to EDR data are reportedly patterned after the California law. Legislation has surfaced in Alaska, Arkansas, Montana, New Hampshire, New York, North Dakota, Tennessee, Texas, Virginia and West Virginia.
PCI said it supports exemptions that would allow insurer access to EDR data for claims adjusting and investigation, fraud investigation, loss control and research.
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