Imagine cruising in your modern car, enjoying the ease of technology, but what if that same technology is quietly collecting data on your driving habits? This isn’t science fiction; it’s a current reality where your vehicle’s data could be the reason your insurance costs are climbing, and drivers are starting to feel the impact.
Take Kenn Dahl, a Seattle businessman whose car insurance jumped 21% in 2022. He blames GM’s OnStar Smart Driver system in his Chevy Bolt, as detailed by The New York Times. Dahl’s insurer used a LexisNexis report, tracking his driving for six months, to justify the increase, noting every instance of speeding, harsh braking, and rapid acceleration.
Dahl’s predicament is not isolated; a Cadillac owner in Florida was rejected by seven insurers, facing similar issues due to a LexisNexis report on his driving habits, and is now considering legal action against GM. Both drivers were enrolled in the OnStar Smart Driver service, which markets itself as a tool for safer driving, yet they felt their data was shared without their clear permission, leading to a sense of betrayal.
This issue isn’t confined to GM; Ford, Subaru, Mitsubishi, Honda, Kia, and Hyundai are also involved, with some providing similar data-sharing capabilities, although Ford states it only shares driver behavior data with explicit consent. Data analytics firm Verisk has accessed driver information from millions of vehicles across brands like Ford, Honda, and Hyundai, raising broader concerns about vehicle data privacy.
The consequences of this data dissemination are profound, as car insurance tracking devices, whether physical or app-based, monitor your driving and report it to insurers, potentially adjusting premiums or discounts, but also leading to higher rates for those flagged as higher risks.
Usage-based car insurance (UBI) programs are gaining traction, promising savings for responsible or infrequent drivers, but it’s vital to fully grasp how these devices function, what data they collect, and how they ultimately influence your insurance premiums before signing up.
While these telematics programs are generally optional, allowing drivers to opt-out, the data gathered presents a dual possibility: it can either unlock discounts for exemplary driving or, as demonstrated by Dahl and the Cadillac owner, result in increased premiums based on perceived risky behaviors.
As we navigate the complex landscape of connected vehicles and data-driven insurance policies, drivers must be vigilant about the terms and conditions they accept, emphasizing the crucial role of transparency from both manufacturers and insurers to foster trust and empower drivers with control over their personal data and financial well-being.
The journey ahead on the road is increasingly defined by data, which holds the potential to either reduce your expenses or escalate your insurance costs, serving as a stark reminder that in our interconnected world, even our vehicles are active participants in conversations about us, sometimes revealing more than we’d prefer.
