In the expanding digital landscape, the vehicles we drive are becoming increasingly connected, offering services that range from in-car entertainment to driving assistance technologies. However, this enhanced connectivity comes with an often-overlooked trade-off: your driving data might be shared with insurance companies, potentially leading to higher insurance premiums. These “smart” cars serve as a treasure trove of driver data, not just for automakers but also for insurance companies, as highlighted in a exposé released in March by The New York Times.
The narrative delves into the intricate web of data sharing between auto giants like General Motors and data-collection firms such as LexisNexis, who then peddle this valuable information to insurance companies. For instance, in a stark illustration, a Chevy Bolt EV lessee in 2022 was blindsided when his insurance rates soared by a staggering 21 percent. Shocked, he realized that his driving habits had been discreetly relayed to his insurer without his knowledge or consent. This revelation left him feeling violated, unaware that his every move behind the wheel was meticulously tracked and commodified.
The crux of the matter lies in the transparency surrounding user data collection by automakers. Often, customers are unaware of the extent to which their data is being harvested. While some individuals willingly opt into usage-based insurance, where they consent to having their driving behaviors monitored, The New York Times elucidates how, with internet-connected cars, many drivers unknowingly sign away their data rights.
The privacy dilemma surrounding connected cars mirrors that of smartphones and other personal gadgets. Users frequently agree to terms and conditions without thoroughly perusing the fine print. While there’s an argument for personal accountability in understanding what one consents to, there’s also a reasonable expectation for companies to be forthcoming about the sharing of sensitive information. This ambiguity has prompted California’s privacy regulator to launch an investigation into the practices of automakers regarding data collection and dissemination, as highlighted in the Times article.
GM initiated its venture into driver monitoring via its OnStar connected services, notably through the Smart Driver program introduced on select models from 2013 onwards. Initially, customers willingly opted into a 90-day monitoring period. However, The New York Times suggests that, many OnStar users may be unwittingly enrolled in such programs without their knowledge.
This scenario isn’t unique to GM; it extends to drivers of connected vehicles from various other brands as well. In 2022, LexisNexis publicized its Telematics Exchange, boasting data from over 10 million vehicles. The release indicated that over 60 percent of automakers were actively involved, with plans for full integration by the end of 2022, making driver data readily available to insurers.
For those curious about whether their driving behaviors are being monitored and shared, reviewing the privacy terms of their enrolled connected car services is crucial. Additionally, individuals can exercise their rights under the Fair Credit Reporting Act by requesting a consumer disclosure report through LexisNexis.
Relevant articles:
– Your ‘Connected’ Car May Be Transmitting Your Driving Data to Insurance Companies, Car and Driver
– 8 reasons your car insurance rate changes, libertymutual.com
– What determines the price of an auto insurance policy?, iii.org