New DPS Privacy Policy Could Increase Cost of Car Insurance, Affect Safety Recalls

Updated: 02/06/2014 7:31 AM By: Stephen Tellier

Some are calling it a "bombshell." The Minnesota Department of Public Safety's new policy designed to protect your private information could mean big changes for many Minnesotans.

Opponents of the policy say it could cause your car insurance to cost more, be less convenient to buy -- and even prevent you from getting timely safety recall notices.

When you get a car insurance quote online, you typically type in your name, address, and date of birth -- and the site immediately knows what car you drive, your driving record, and a lot of other information used to give you an accurate quote. That data comes from the state of Minnesota. But DPS wants to start charging more for it -- and you could end up paying the difference.

"That's a cost that will definitely be passed on to the consumer," Mark Kulda, Vice President of Public Affairs at the Insurance Federation of Minnesota, said.

DPS said the new policy is about protecting your personal information -- the driver's license and motor vehicle data for all Minnesotans. Right now, companies can buy that data from the government in bulk. But DPS recently announced those days will soon be over.

DPS wants to charge $5 per driver record -- and those records will only be available during business hours, on "a secure online system." The state said, "This will increase data security, improve accountability, and ensure that DPS will be able to audit all users."

That's not how Kulda sees it.

"We run the risk of not only having to spend a lot more money buying the data, but also the availability of the data," Kulda said. "You may have to pay for an insurance quote, which you don't have to now. You may not be able buy insurance on nights and weekends. You may not be able to prove to your insurance company that you're a good driver, and if you can't do that, you may be paying a much higher premium."

Kulda also said car makers use that same data to send out important recall notices.

"We would be the only state in the country where its citizens would not be allowed to be informed about this potential problem," Kulda said.

And the new policy is scheduled to kick in next month.

"March 10th is going to get here really soon," Kulda said.

This could also have a huge impact on data services companies like Thomson Reuters, and a few smaller, local companies that would likely close their doors if they can't buy this data in bulk. It could also impact car dealers -- even sites like Carfax may simply not work for Minnesotans.

The Insurance Federation of Minnesota and several other stakeholders met with officials from Gov. Mark Dayton's office last week. On Wednesday, Dayton's spokesman confirmed that they're looking into the concerns surrounding this issue.