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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.

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.

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.

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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.”

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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.

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