Giorgos Zacharia, PhD Co-founder | Insurify
Maryland lawmakers are considering new regulations on how auto insurers can collect and use telematics data, aiming to protect drivers' privacy and prevent unfair rate increases. State Senator Alonzo Washington introduced a bill in January that seeks to regulate the use of driving data by insurance companies. The proposed legislation would limit the amount of data collected, require disclosure of telematics usage, audit systems, and prohibit insurers from using such data to cancel or non-renew policies.
Washington emphasized the importance of consumer protections at a Finance Committee hearing on February 3rd. "While proponents argue that this technology encourages safe driving, the reality is far more complex," he stated. "This bill aims to address the critical concerns associated with telematics-based insurance pricing by ensuring consumer protections, preventing rate hikes based on collected data, and upholding privacy rights." He also highlighted potential biases affecting low-income individuals and rural residents who may face longer commutes due to limited public transportation options.
The proposed regulations have garnered support from some state officials but faced criticism from insurers. Marie Grant, acting insurance commissioner with the Maryland Insurance Association (MIA), backs the legislation for its requirement that insurers develop an appeals process. "We actually see a lot of complaints on this issue," she noted. "Folks who are enrolled in telematics programs often have pretty limited abilities to appeal or challenge data with their carrier."
However, Marta Harding from State Farm expressed concerns that the draft legislation could effectively ban telematics use. She acknowledged existing regulations in Maryland that ensure any rate increases are actuarially justified and indicated State Farm's willingness to work with legislators on disclosures or other issues. "We do think this information is highly predictive," Harding said. "There’s very little that’s as predictive of future loss as somebody’s driving habits."
Maryland currently has high car insurance rates—the highest in the country according to Insurify—with average annual costs reaching $4,060 after a significant increase in 2024. Factors contributing to these rates include surging stolen vehicle claims and legislative changes affecting insurer financial responsibilities.
Other states are also exploring telematics-related legislation. For instance, Maine included telematics in its right-to-repair laws in 2023, while New York lawmakers reintroduced a bill requiring driver consent for collecting such data.
If approved as written, Maryland's law would take effect on October 1st, 2025. Washington remarked: "No state has explicitly banned insurance companies from using this tool to alter rates, making Maryland a leader in insurance consumer protection if this bill is enacted."
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