Kenn Dahl (real name, job not Beach) saw his car insurance bill jump 21% in 2022. Shocked, he asked for an explanation. An insurance agent told him to check his LexisNexis report. That’s how he learned the report existed.
Reading it was a shock – 258 pages, it “included the dates of 640 trips, their start and end times, the distance driven and an accounting of any speeding, hard braking or sharp accelerations.”
Dahl’s Chevrolet Bolt was sending the company a report with details on his driving every time he started the car.
It’s not unusual. The New York Times reports, “Automakers and data brokers that have partnered to collect detailed driving data from millions of Americans say they have drivers’ permission to do so.”
In Dahl’s case, “permission” came through General Motors’s OnStar Smart Driver program – which GM markets as a sort of driving coach. The OnStar website says it “provides driving insights on how you can become a smarter, safer driver.” Drivers earn badges for good behavior behind the wheel and gamifying driving.
But it also reports to LexisNexis, which sells the data to car insurance companies.
Car Insurance Costs Spiking Nationwide
Car insurance rates have jumped nationwide in recent years. A recent analysis by the U.S. Bureau of Labor Statistics found insurance costs have risen 71% in the last decade and 18% in just the first half of last year.
The problem is more severe in some states than others. Florida’s insurance costs have soared so high they’ve driven some insurers to abandon the state entirely.
Higher repair costs are partly to blame. Today’s cars are complex devices full of costly electronics, often in vulnerable places. Parking sensors, blind-spot monitors, and automatic emergency braking systems all require sensors placed on the exterior of a car. Even a fender bender can require replacing thousands of dollars worth of electronics.
Climate-change-driven weather events are raising rates in some places, too. Insurers have cited weather risks for higher rates in California and Florida.
Insurers Seeking Data On Your Driving
That has many companies seeking more specific data on how applicants drive.
Some get there quite openly. Many insurance companies offer discounts to drivers who install monitoring apps on their phones. These apps use a smartphone’s built-in accelerometer to track sudden acceleration and hard braking events – and give drivers a limited time window to tell the app they’re the passenger for a particular drive.
Some Car Companies Providing It
But not all of us volunteer to be tracked. The Times explains, “In recent years, automakers, including GM, Honda, Kia, and Hyundai, have started offering optional features in their connected-car apps that rate people’s driving. Some drivers may not realize that, if they turn on these features, the car companies then give information about how they drive to data brokers like LexisNexis.”
That data may be limited – a Subaru spokesperson told the Times the company only shares odometer readings through its Starlink safety system.
But Kia, Mitsubishi, Hyundai, and both Honda and its Acura luxury arm all offer driver coaching systems like OnStar Smart Driver. All, the Times says, “collect information about people’s mileage, speed, braking and acceleration that is then shared with LexisNexis or Verisk.”
The terms and conditions of the programs sometimes explain the data sharing.
But few Americans read them in detail. And sometimes, it’s not. Times reporter Kashmir Hill explains, “I have a GM car, a Chevrolet. I went through the enrollment process for Smart Driver; there was no warning or prominent disclosure that any third party would get access to my driving data.”
Automakers and Privacy a Growing Concern
And automakers are not known for extensive privacy protections. In an analysis last year, privacy researchers from a prominent tech watchdog group found “cars the official worst category of products for privacy ever reviewed.”
The system can even be active for drivers who have never enrolled. “It is possible that GM drivers who insisted they didn’t opt-in were unknowingly signed up at the dealership,” the Times notes. A manual provided to salespeople at GM dealerships promises bonuses to those who enroll buyers in the program.
Kia, Subaru, and Mitsubishi all participate in the LexisNexis Telematics Exchange program. Rival company Verisk “also claims to have access to data from millions of vehicles and partnerships with major automakers, including Ford, Honda and Hyundai.”
Ford, however, tells the Times it “does not transmit any connected vehicle data” to LexisNexis or Verisk.
