California Bill Would Let Insurers Use Telematics to Set Your Auto Rate

California is the only state in the nation that bans telematics from being used to set personal auto insurance rates, and a new bill could finally change that.

Reported by the Los Angeles Times, the Consumer Driving Data Protection Act is moving through the California Legislature and would allow insurers to use speed, braking, and other driving data to help set individual premiums. The Save Max Quote Index, drawn from 3.3 million+ real quote requests, consistently shows California drivers paying among the highest premiums in the country, context that makes this California telematics auto insurance bill especially consequential for millions of households.

The bill is authored by Assemblymember Tina McKinnor, a Hawthorne Democrat who says her motivation is deeply personal. After losing three friends in auto accidents, McKinnor channeled her grief into legislation she believes could save lives and reduce costs simultaneously.

California's telematics ban may finally be ending, here's what's happening

California has blocked telematics-based auto insurance pricing for more than two decades, even as every other state in the country has allowed it voluntarily. That makes the state a stark outlier in a rapidly growing industry.

The Consumer Driving Data Protection Act, as reported by the Los Angeles Times, would permit insurers to track driving habits, speed, braking, distracted driving, and use that data as a component in setting individual premiums. Crucially, participation would be voluntary. Drivers who decline would continue to have their rates determined by the existing Department of Motor Vehicles point system, which accounts for moving violations and accidents.

The California auto insurance market is massive. The state has more than 27 million licensed drivers, and average rates for insurance written by the largest California auto insurers have climbed more than 30% since 2022, according to S&P Capital IQ. Opening the state to telematics would also unlock access to a global telematics market expected to top $92 billion in revenue this year and reach $270 billion by 2033, according to Grand View Research.

The bill has already passed through two state Senate committee hearings. But significant hurdles remain.

How telematics-based insurance actually works

The mechanics are more straightforward than many drivers expect.

Data is collected through smartphone apps, transponders, and other technology. Those apps can detect not only speed and braking behavior but also whether a driver is handling their phone while behind the wheel, a leading cause of collisions alongside speeding.

In California's proposed framework, insurers would likely collect driving data over a six-month period and then use those results to quote premiums for the following six-month period. The system also provides real-time feedback, and drivers would have the right to dispute the data collected about them.

Insurers and safety groups argue telematics produces a more accurate picture of risk than a static DMV record. As insurer ratings agency A.M. Best has noted, insurers have been accelerating investments in telematics, data, and artificial intelligence to better predict driver risk and set rates more precisely.

"For me, this is a way to incentivize to slow people down," McKinnor said. "If 10 people opt in and slow down, and if we could save 10 lives, that will make me extremely happy."

The SMQI tracks how rapidly California premiums have risen compared to neighboring states, a trend that makes any potential savings mechanism worth understanding before the bill reaches a final vote.

Who wins and who loses under the proposed system

A study last year by the Maryland Insurance Administration offers the closest available data on how telematics programs actually shake out for real drivers. Looking at 2023 results, the study found a clear three-way split among enrollees.

Source: Maryland Insurance Administration study cited by the Los Angeles Times.

Nearly one in three drivers who opted into telematics in Maryland saw their rates go down. Fewer than one in four saw them rise.

The drivers most likely to benefit are those who may carry a poor historical DMV record but have since cleaned up their habits. A driver who racked up violations years ago but now brakes smoothly and avoids phone use could demonstrate current safety behavior that their DMV record simply cannot capture.

Drivers most at risk of seeing increases are those who believe they are safe but whose real-time data tells a different story, hard brakers, frequent speeders, or distracted drivers who haven't been cited yet.

The 45.2% whose rates went unchanged represent a middle ground: drivers whose telematics scores roughly aligned with what their existing record already suggested.

One complication flagged by critics: drivers with poor records who opt in and score well could end up paying less than excellent drivers who simply refuse tracking, potentially shifting costs onto those who value their privacy.

Why privacy and consumer groups are pushing back

The opposition to this California telematics auto insurance bill is pointed and specific.

Consumer Watchdog, founded by Harvey Rosenfield, the author of Proposition 103, has been among the most vocal opponents. Executive director Carmen Balber framed the core tension bluntly.

"This bill forces Californians to choose between their privacy and affordable auto insurance," said Carmen Balber, executive director of Consumer Watchdog.

The group also objects to the opacity of the scoring systems.

"It rips out Prop. 103's good-driver protections and replaces your actual driving record with a black-box score built on sweeping data collection," Balber said.

Privacy concerns are not hypothetical. This year, General Motors agreed to pay $12.75 million for violations of California's Consumer Privacy Act after selling driving data from California motorists enrolled in its OnStar roadside assistance and navigation service to data brokers without proper notice or consent. That case is widely cited as a cautionary example of how telematics-adjacent data can be misused.

Critics also point to growing risks from data breaches, illegal data sales, and the ability to "re-identify" individuals even from anonymized datasets. Although the bill bans the outright sale of collected data, Consumer Watchdog argues loopholes remain that could allow its disclosure through other channels.

There is also a deeper question about whether telematics actually reduces accidents. While supporters cite studies, including one published in the peer-reviewed JAMA medical journal, showing reductions in unsafe driving, A.M. Best director Chris Draghi offered a measured counterpoint: the voluntary nature of these programs means the people who opt in may already be safer drivers, skewing the results.

What the California Department of Insurance wants changed

Even with industry backing and moving personal testimony, the bill faces opposition from the very agency that would oversee it.

The California Department of Insurance sent a letter dated June 20 to the Senate Insurance Committee raising three core objections: the bill shifts regulatory compliance accountability from insurers to telematics vendors; it does not give the department sufficient oversight over those vendors; and it imposes a large regulatory burden on the department itself.

A series of amendments adopted by the Senate's Privacy, Digital Technologies and Consumer Protection Committee addressed some concerns. But McKinnor acknowledged that significant work remains.

"They gave me, like, 15 or 20 pages of amendments. I believe we will get there. We're working on those amendments with them because otherwise, I don't think the bill will pass," McKinnor said.

Michael Soller, a spokesman for Insurance Commissioner Ricardo Lara, declined to comment on the ongoing talks.

What this means for you

If you are a California driver, review your current DMV record now and honestly assess whether your day-to-day driving habits are better or worse than that record suggests. If you are a safer driver than your history shows, telematics could work in your favor. Track the bill's progress through the remaining legislative steps, and compare your current premiums against Washington State auto insurance and Oregon auto insurance rates to understand your regional baseline before making any decisions about opting in.

What happens next for the bill

The path forward is narrow but not closed.

The bill has cleared two Senate committee hearings, helped by powerful personal testimony. Damian Kevitt, who lost his right leg in a 2013 hit-and-run collision in Griffith Park while riding his bicycle, co-sponsors the legislation through his group Streets Are For Everyone and has been among the most compelling voices in its favor.

The largest structural obstacle is Proposition 103 itself. Passed by California voters in 1988, the measure requires rates to be set primarily by driving record, years of experience, and annual miles driven, and it cannot be amended without a two-thirds vote of the Legislature. Any amendment must also further the proposition's original purposes, a legal threshold that critics argue the bill fails to meet.

McKinnor continues negotiating with the Department of Insurance over the outstanding amendment requests. Industry lobbyist Allison Adey, representing the Personal Insurance Federation of California, has suggested that concerns about cost-shifting between driver pools could potentially be resolved by creating separate risk pools that don't mix tracked and untracked drivers.

Whether the bill can thread all of those needles, legislative supermajority, department approval, and privacy group opposition, before the current session concludes remains an open question.

FAQ

What driving behaviors would insurers track under the California telematics bill?

Under the Consumer Driving Data Protection Act, insurers could track speed, braking, and other driving habits. Smartphone apps used for data collection can also detect whether a driver is handling their phone while driving, since distracted driving is identified in the bill's context as a leading cause of accidents.

Can insurers share or sell my driving data if the bill passes?

The bill includes a ban on the sale of collected driving data. However, Consumer Watchdog has argued the legislation contains loopholes that could allow disclosure through other means. The General Motors OnStar case, which resulted in a $12.75 million penalty, is frequently cited as a real-world example of how driving data can be misused when protections are inadequate.

Will my rates automatically go up if I opt into telematics?

Not necessarily. According to a Maryland Insurance Administration study of 2023 data, 31.2% of enrolled drivers saw rate decreases, 23.6% saw increases, and 45.2% experienced no change. Your outcome would depend on how your actual recorded driving behavior compares to the risk your current DMV record implies.

Do I have to participate in telematics if the bill becomes law?

No. The bill is entirely voluntary. Drivers who prefer not to be tracked would continue to have their rates determined by the existing DMV point system, which considers moving violations and accidents.

Why is California the last state to allow telematics in auto insurance pricing?

California's Proposition 103, passed in 1988, strictly regulates how auto insurance rates can be set and requires a two-thirds legislative vote to amend. The law has effectively kept telematics out of personal auto insurance pricing even as all other states have permitted it on a voluntary basis for more than two decades.

About Taleah McGuire

Taleah McGuire is a Regional Analyst at Save Max Auto with 11+ years of insurance experience including senior roles at Kentucky Farm Bureau. She covers regulatory news, state-specific reform legislation, and traditional carrier coverage. Read more from Taleah McGuire →

Edited by Brooke Grissom.

Methodology

This article is grounded in the source linked above. Save Max Auto data points referenced here are drawn from the Save Max Quote Index (SMQI), a proprietary instrument reflecting 3,364,317 real consumer quote requests submitted to savemaxauto.com. State and carrier rankings reflect the lifetime dataset; year-over-year shifts reflect a rolling 12-month window. The index is refreshed monthly. External authority figures referenced (NAIC, NHTSA, state regulators) reflect the most recent public data releases available at time of writing.

Sources

• Primary source: Los Angeles Times, "Want cheaper car insurance? You might get it under a bill that allows insurers to track your driving habits"