Carmakers share drivers' behavior with insurers
Kenn Dahl says he has always been a careful driver. The owner of a software company near Seattle, he drives a leased Chevrolet Bolt. He's never been responsible for an accident.
So Dahl, 65, was surprised in 2022 when the cost of his car insurance jumped 21%. Quotes from other insurance companies were also high. One insurance agent told him his LexisNexis report was a factor.
LexisNexis is a New Yorkbased global data broker with a “Risk Solutions” division that caters to the auto insurance industry and has traditionally kept tabs on car accidents and tickets. Upon Dahl's request, LexisNexis sent him a 258-page “consumer disclosure report,” which it must provide per the Fair Credit Reporting Act.
What it contained stunned him: more than 130 pages detailing each time he or his wife had driven the Bolt over the previous six months. 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. The only thing it didn't have is where they had driven the car.
On a Thursday morning in June for example, the car had been driven 7.33 miles in 18 minutes; there had been two rapid accelerations and two incidents of hard braking.
According to the report, the trip details had been provided by General Motors — the manufacturer of the Chevy Bolt. LexisNexis analyzed that driving data to create a risk score “for insurers to use as one factor of many to create more personalized insurance coverage,” according to a LexisNexis spokesperson, Dean Carney. Eight insurance companies had requested information about Dahl from LexisNexis over the previous month.
“It felt like a betrayal,” Dahl said. “They're taking information that I didn't realize was going to be shared and screwing with our insurance.”
In recent years, insurance companies have offered incentives to people who install dongles in their cars or download smartphone apps that monitor their driving, including how much they drive, how fast they take corners, how hard they hit the brakes and whether they speed. But “drivers are historically reluctant to participate in these programs,” as Ford Motor put it in a patent application that describes what is happening instead: Car companies are collecting information directly from internet-connected vehicles for use by the insurance industry.
Sometimes this is happening with a driver's awareness and consent. Car companies have established relationships with insurance companies, so that if drivers want to sign up for what's called usage-based insurance — where rates are set based on monitoring of their driving habits — it's easy to collect that data wirelessly from their cars.
But in other instances, something much sneakier has happened. Modern cars are internet-enabled, allowing access to services like navigation, roadside assistance and car apps that drivers can connect to their vehicles to locate them or unlock them remotely. 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.
Automakers and data brokers that have partnered to
collect detailed driving data from millions of Americans say they have drivers' permission to do so. But the existence of these partnerships is nearly invisible to drivers, whose consent is obtained in fine print and murky privacy policies that few read.
Especially troubling is that some drivers with vehicles made by GM say they were tracked even when they did not turn on the feature — called OnStar Smart Driver — and that their insurance rates went up as a result.
“GM's OnStar Smart Driver service is optional to customers,” a GM spokesperson, Malorie Lucich, said. “Customer benefits include learning more about their safe driving behaviors or vehicle performance that, with their consent, may be used to obtain insurance quotes. Customers can also unenroll from Smart Driver at any time.”
Dahl shared his experience on an online forum for Chevy Bolt enthusiasts, on a thread where other people expressed shock to find that LexisNexis had their driving data. Warnings about the tracking are scattered
across online discussion boards dedicated to vehicles manufactured by GM — including Corvettes, a sports car designed for racking up “acceleration events.” (One driver lamented having data collected during a “track day,” while testing out the Corvette's limits on a professional racetrack.)
Numerous people on the forums complained about spiking premiums as a result. A Cadillac driver in Palm Beach County, Florida, who asked not to be named because he is considering a lawsuit against GM, said he was denied auto insurance by seven companies in December. When he asked an agent why, she advised him to pull his LexisNexis report. He discovered six months of his driving activity, including many instances of hard braking and hard accelerating, as well as some speeding.
“I don't know the definition of hard brake. My passenger's head isn't hitting the dash,” he said. “Same with acceleration. I'm not peeling out. I'm not sure how the car defines that. I don't feel I'm driving aggressively or dangerously.”
When he finally obtained car insurance, through a private broker, it was double what he had previously been paying.
The Cadillac owner, Dahl and the drivers on the forums had all been enrolled in OnStar Smart Driver. OnStar is GM's Internet-connected service for its cars and Smart Driver is a free, gamified feature within GM's connected car apps (all part of OnStar, but branded MyChevrolet, MyBuick, MyGMC and MyCadillac).
Smart Driver can “help you become a better driver,” according to a corporate website, by tracking and rating seat belt use and driving habits. In a recent promotional campaign, an Instagram influencer used Smart Driver in a competition with her husband to find out who could collect the most digital badges, such as “brake genius” and “limit hero.”
In response to questions from The New York Times, GM confirmed that it shares “select insights” about hard braking, hard accelerating, speeding over 80 mph and drive time of Smart Driver enrollees with LexisNexis and another data broker that works with the insurance industry called Verisk.
Customers turn on Smart Driver, said Lucich, the G.M. spokesperson, “at the time of purchase or through their vehicle mobile app.” It is possible that GM drivers who insisted they didn't opt in were unknowingly signed up at the dealership, where salespeople can receive bonuses for successful enrollment of customers in OnStar services, including Smart Driver, according to a company manual.
The Cadillac owner in Florida said he had not heard of Smart Driver and never noticed it in the MyCadillac app. He reviewed the paperwork he signed at the dealership when he bought his Cadillac in the fall of 2021 and found no mention of signing up for it.
“When a customer accepts the user terms and privacy statement (which are separately reviewed in the enrollment flow), they consent to sharing their data with third parties,” Lucich wrote in an email, pointing to OnStar's privacy statement.
But that statement's section on “third-party business relationships” does not mention Smart Driver. It names SiriusXM as a company GM might share data with, not LexisNexis Risk Solutions, which GM has partnered with since 2019.
Jen Caltrider, a researcher at Mozilla who reviewed the privacy policies for more than 25 car brands last year, said that drivers have little idea about what they are consenting to when it comes to data collection. She said it is “impossible for consumers to try and understand” the legalese-filled policies for car companies, their connected services and their apps. She 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 said. “They're about making money.”