May 6, 2024
After an unexpected increase in her car insurance premiums, Temieka Clay decided to shop around for a new provider. During this process, she received a denial letter. In it, an insurance broker suggested she pull her NexisLexis report to find out why.
Upon doing so, Clay discovered over 600 records from her car’s OnStar Smart Driver system detailing her driving behavior, according to WSB-TV Channel 2 Action News.
Advertisement
“The OnStar app, you think safety if [your car] gets stolen,” the Georgia-based motorist told the local TV news show. “But certainly not spying on me and sending information to the insurance company.”
Clay says the system was tracking activity on her Chevy Camaro, such as acceleration, high-speed and hard-brake events, and the car manufacturer General Motors (GM) was sharing it with data brokers.
She suspects the shared data is to blame for what she claims was an 80% spike in her insurance premiums, despite no accidents or tickets on her record.
Driver says automakers are 'screwing' with insurance
Some insurance providers offer usage-based insurance, where rates are set based on monitoring of driving behavior. Data can be collected via technology installed in your vehicle or a car’s built-in system, such as OnStar, according to Forbes Advisor.
These insurance policies hold the promise of lowering your premiums if you’re a good driver. But this doesn’t seem to be the case for many motorists. Forbes Advisor cites a TransUnion survey from 2022 that found insurance rates decreased for only 48% of respondents enrolled in such data-tracking programs. Rates stayed the same for 30% of respondents, while 18% saw their rates increase. The remaining 4% said they didn’t know if their rates were affected.
But insurance companies may not require you to sign up for a usage-based policy in order for them to gather this type of information. Many modern vehicles offer optional features in their connected car apps that rate your driving. Turning these features on, however, may put your data at risk of being shared with brokers such as NexisLexis, a company that helps track auto incidents for insurance companies.
Software company owner Kenn Dahl, who claims he’s always been a careful driver and has never been in an accident, says his insurance premiums jumped by 21% in 2022. Like Clay, he shopped around for new insurance, but received a number of high quotes, he told The New York Times. An agent recommended he pull his LexisNexis report.
Advertisement
According to the report, GM shared his Chevy Bolt driving data with LexisNexis, which was analyzed to create a risk score “for insurers to use as one factor of many to create more personalized insurance coverage,” LexisNexis spokesperson Dean Carney told The Times.
The experience left a bad taste in Dahl’s mouth.
“It felt like a betrayal,” he told The Times. “They’re taking information that I didn’t realize was going to be shared and screwing with our insurance.”
GM isn’t the only automaker that has shared driving data. Ford and Kia, among others, participate in a data exchange program with LexisNexis. In 2022, LexisNexis risk services revealed they were gathering data on more than 10 million cars.
Advertisement
Automakers and data brokers insist they have drivers’ permission to collect this data, reports the Times, but often these agreements can be found in fine print or privacy policies that consumers typically don’t read when activating tracking features.
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
How to find out if your car is 'spying' on you
GM says its OnStar Smart Driver service is optional and aims to help customers learn more about their safe driving behaviors or vehicle performance. Spokesperson Malorie Lucich told The Times that when a customer accepts the user terms and privacy statement, they consent to sharing their data with third parties.
But Jen Caltrider, a researcher at Mozilla, says it’s “impossible for consumers to try and understand” these privacy policies and called cars “a privacy nightmare.”
“The car companies are really good at trying to link these features to safety and say they are all about safety,” Caltrider notes. “They’re about making money.”
There are ways for you to check how your driving data is being shared. Check your connected car app to determine if you’ve signed up for one of these features — Lucich said customers can unenroll from Smart Driver at any time.
And you can always request your LexisNexis report or Verisk report under the Fair Credit Reporting Act. Verisk is another data company connected to the insurance industry.
A GM spokesperson also told Channel 2 Action News in a statement: “As of March 20th, OnStar Smart Driver customer data is no longer being shared with LexisNexis or Versick. Customer trust is a priority for us, and we are actively evaluating our privacy processes and policies.”
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Vanguard’s outlook on U.S. stocks is raising alarm bells for retirees. Here’s why and how to protect yourself
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.
