New cars are spy devices on wheels.
Automakers are collecting data on the driving habits of Americans and feeding them to a data broker who then shares this data with insurance companies.
Many American drivers are beginning to notice that their car insurance rates are surging – including Kenn Dahl, 65, of Seattle, Washington.
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 by 21 percent. Quotes from other insurance companies were also high. One insurance agent told him his LexisNexis report was a factor.
LexisNexis is a New York-based global data broker with a division that caters to the auto insurance industry by providing them with risk assessment data on drivers, including keeping tabs on car accidents and driving ticket issuances.
Upon Dahl’s request, LexisNexis sent him a 258-page “consumer disclosure report,” which it must provide per the Fair Credit Reporting Act.
The report contained more than 130 pages detailing each time he or his wife had driven the Bolt over the previous six months – amounting to 640 trips. The report included the dates of all the trips, their start and end times, distance driven and an accounting of any instances of speeding, hard braking or sharp accelerations. The only data it did not contain was where the car was driven.
One example of data collected is that on a Thursday morning in June, the data noted that the car was driven 7.33 miles in 18 minutes and there were two recorded incidents of rapid accelerations and another two recorded hard braking moments.
According to the report, the trip details had been provided by General Motors – the manufacturer of the Chevy Bolt. LexisNexis spokesperson Dean Carney noted that the data it receives from auto manufacturers is used to analyze the driving data of car owners and to create a risk score “for insurers to use as one factor of many to create more personalized insurance coverage.”
Car insurance companies and auto manufacturers working together to snoop on drivers
The information regarding LexisNexis’ role in creating risk assessments for car insurers with the help of auto manufacturers is providing more fuel to the accusations that car-related companies have been secretly surveilling motorists and compiling data on their driving habits using sensors that record how far and how quickly or slowly they drive and how they accelerate and brake.
The automakers share the data with analytics firms, which in turn sell it to insurers that use it to adjust premiums. The goal is for insurance companies to use this data as proof that they need to increase insurance costs on certain drivers.
For more than a decade, insurance companies have been offering special deals to those willing to use third-party trackers and apps that record how they accelerate and brake. But for the most part, Americans rejected those schemes. So, these scorned insurance companies found a workaround by leaning on automakers to generate that data with sensors built into their cars so they can then buy it in secret.
“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.”
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