The EU has put a distraction sensor in every new car, but nobody outside the car can use it

Since 7th July, every new car and van sold in the EU has to track where the driver is looking. The data cannot leave the vehicle, so insurers, telematics providers and video telematics vendors are affected in different ways.

The second phase of the EU’s General Safety Regulation took effect on 7th July 2026. Every new car and van registered in the EU now has to come with emergency braking that detects pedestrians and cyclists, a driver distraction warning, better forward vision, more safety glass and new tests for worn tyres. The European Commission confirmed the change on 8 July.

Fewer crashes, but slowly

Pedestrian and cyclist braking should cut crashes, but slowly. The Commission expects the regulation as a whole to save more than 25,000 lives and prevent at least 140,000 serious injuries by 2038. The rules only apply to newly registered vehicles, so an insurer’s claims experience will improve over a decade, not a renewal cycle.

Frequency falls, repair bills rise

LexisNexis Risk Solutions looked at 11 million US vehicles from model years 2014 to 2019 and found that ADAS cut loss costs by 23% for bodily injury, 14% for property damage and 8% for collision, with little change in claim severity. The data is American and covers older sensors, so this should be seen as a rough guide for Europe.

The lack of a comparable fall in severity seems to come from the fact that repairs have become more expensive since. CCC says calibrations appeared on more than 23% of repairable appraisals in 2025, up from 0.9% in 2017. Phase 2 adds to it: a forward camera behind the windscreen and more specified safety glass are both exposed in the low-speed knocks that make up most claims.

For pricing, ADAS fitment needs to be a rating factor at vehicle level. Most European insurers still can’t reliably tell which systems a given VIN has, so the lower frequency and the higher repair cost both get averaged into the base rate.

The distraction data stays locked in the car

The distraction warning matters most. Under Delegated Regulation (EU) 2023/2590, it has to monitor where the driver is looking and warn them if their eyes stay off the road for too long: 3.5 seconds above 50 km/h, 6 seconds between 20 and 50 km/h. The rules don’t specify a technology, but tracking gaze in all lighting implies a camera facing the driver. Every new vehicle in the EU now measures driver attention directly and continuously.

However, nobody outside the vehicle can use any of this data. Article 6(3) of Regulation (EU) 2019/2144 says these systems must work as closed loops: no continuous recording or retention beyond what the function needs, no access for third parties, and deletion straight after processing.

That sits oddly with the rest of EU data policy. Since September 2025, the Data Act has let vehicle users pass their connectedcar data to third parties, insurers included. Operational data is being opened up, while driver-state data has been shut away by the same regulation that required it to be collected.

For usage-based insurance (UBI) providers, this keeps the case for their own behavioural measurement intact. A programme that wants a distraction score will still have to build one from phone handling, screen use and driving context.

Video telematics: the alert is now free

Video telematics is where the gaps are the most shocking.

Real-time in-cab alerts for distraction, phone use, drowsiness, smoking and seatbelts are what the category sells. They are how Lytx, Netradyne, Samsara, CameraMatics and LightMetrics turned passive dashcams into behavioural safety systems. Since 7th July 2026, a version of that alert comes free with every new vehicle, and the distraction rule covers vans, trucks, buses and coaches as well as cars.

What the factory system doesn’t give anyone is the part after the beep. Because it is a closed loop, it warns the driver and forgets. There is no event record, clip, scorecard or coaching queue, and nothing that could serve as evidence. A safety manager with a fleet of 2026 vehicles can see no more of their drivers’ attention than they could in 2019.

There are 3 other gaps. Drivers can switch the system off, and an operator can’t check that it was running on a given shift. Retrofit demand won’t disappear either: type-approval only covers new registrations, so fleets will be of mixed ages well into the 2030s, and a safety policy covering only the newest vehicles isn’t much of a policy. And Article 6(3) tells manufacturers to avoid overlapping warnings, a duty that doesn’t reach aftermarket hardware, so a retrofit unit adds an extra, unregulated alert.

Driver-monitoring chips are heading into mass OEM production, which makes detection cheaper and favours Tier 1 suppliers and licensors. Video telematics providers will have to compete on multi-camera coverage, coaching, claims exoneration, insurer integrations and running one safety programme across a mixed fleet. Vendors who sell detection will find that harder to argue in a 2027 tender. Those who sell the record, the workflow and the insurance outcome should be largely unaffected, and may even benefit from a regulator endorsing the idea.

A harder privacy test for retrofit cameras

The factory system is a closed loop because watching a driver’s face continuously is intrusive, and European regulators are starting to apply the same thinking to retrofit cameras.

On 16 June 2026, three weeks before phase two took effect, Sweden’s data protection authority reprimanded Securitas Sverige over driver-facing cameras in company vehicles. The system analysed driver behaviour throughout the drive, could send warnings to the driver and the employer, and recorded for part of the time. The authority found no legal basis under Article 6(1) of the GDPR. It is one national reprimand over a limited pilot, not an EU-wide precedent, but the features involved are close to standard in the industry.

For vendors, the mandate may raise the bar. A legitimate interests assessment used to weigh continuous driver-facing analysis against no monitoring at all. Since July 2026 the alternative is a factory-fitted system that meets the safety goal without keeping data or reporting to the employer, which makes proportionality harder to argue. Vendors will have to justify the extra value of the record, the coaching loop and the evidence file, and works councils will ask the same thing.

What to do about it

Insurers should rate ADAS fitment at vehicle level, review repair-cost and total-loss assumptions for newly registered cars, and not plan a product around OEM driver-state data becoming available. The regulation rules it out.

Video telematics vendors and their fleet customers should separate the alert from the service around it. The alert is now free. The record, the coaching workflow, the exoneration file and consistency across a mixed fleet are what customers should be paying for, and what belongs in the data protection impact assessment.

Find out more

PTOLEMUS quantifies the impact of connected vehicles, ADAS and automated driving on the auto insurance and UBI markets in the UBI Global Study, now in its 5th edition. It runs to 1,360 pages across 33 markets and draws on more than 450 active UBI programmes and 65 executive interviews. A free 100-page abstract is available to download.

For the fleet side of this question, including the OEM and telematics service provider dynamic, see our Commercial Fleet Telematics Global Study, or contact me to discuss either.

Article written by Alex Tallon, under PTOLEMUS copyright