Be careful if you drive a connected car! Major car manufacturers sell their customers’ driving data to insurance companies who use it to increase their rates.
In the cabin of your connected car, you feel safe, well protected by a whole range of sensors which alert you of the slightest problem. But are you aware that your every move is being watched? There are small black boxes in modern vehicles that record all the parameters of your driving: your average speed, the distance traveled, departure and arrival times, the number of times you braked suddenly or accelerated quickly, etc. Sometimes you don’t wear your seat belt… Nothing escapes them! All this data allows manufacturers to analyze accidents in order to improve the safety of their vehicles. But not only.
A report from the very serious New York Times reveals that manufacturers share the driving habits of their customers with insurance companies, without the drivers having explicitly consented. This is the case for companies such as General Motors, Honda, Mitsubishi, Kia and Hyundai. They use data from connected cars to establish a behavioral profile of the driver, a profile which they then sell to third parties, such as insurance companies. The latter rely on it to charge higher premiums to some of their policyholders. A very juicy business carried out on the backs of customers.
This is the case of General Motors, which spied on millions of drivers for years via its OnStar system, its connected services plan, without their knowledge or having activated the system themselves. In ten federal complaints filed last month, American drivers claim they never knowingly enrolled in the program, but recently learned that General Motors had provided their driving data to the company LexisNexis. One of the plaintiffs notably drove his car on a racing circuit and saw his insurance premium almost double, with an increase of more than $5,000 per year. The same goes for a driver, who was not an OnStar subscriber, who discovered that LexisNexis had her driving data. Oddly, over the last two years, his insurance premium has increased by 50%.
This case highlights the challenges of the massive collection of data by connected cars and the debate on their use and sharing, particularly for insurance. To avoid being fooled, remember to read the fine print of the general conditions of use (CGU) before accepting anything. And, when you can, consider deactivating the tracking functions in your vehicle’s settings.