Is Your Car Spying on You? Navigating Vehicle Telematics Privacy and Insurance Rates

Under the Hood: Vehicle Telematics Privacy and Insurance Rates

Imagine you’re driving home, enjoying the technology in your car, when a thought crosses your mind: With all this tech, how much of my driving data is being shared?

This question brings us to the heart of vehicle telematics privacy concerns and how telematics can impact insurance rates.

A Driver’s Unexpected Journey into the World of Data-Driven Insurance

Kenn, a careful driver in Seattle, was shocked when his insurance rates spiked by 21%. Kenn was 65 years old, drove a leased Chevrolet Bolt, and had never caused an accident.

How could this have happened? After some digging, Kenn discovered the answer.

Car Companies are Sharing Driving Data with Insurers

Kenn’s detailed driving data was being shared with insurance companies by General Motors.

How? Via LexisNexis, a global data broker. The LexisNexis Telematics Exchange program enables car companies to provide insurers with data about drivers detailed habits. The insurers then use this data to adjust insurance premium rates.

Kenn dug deeper and got a copy of his consumer disclosure report from LexisNexis. LexisNexis was required to provide Kenn with a copy of the report by the The Fair Credit Reporting Act.

640 Trips in 6 Months

The report was more than 130 pages long. It included the details of 640 trips that Kenn and his wife made in the Bolt in six months, such as:

• Start time
• End time
• Distance driven
• Any speeding
• Any hard braking
• Any sharp accelerations

This data was used by Kenn’s insurance company to raise his rates. When Kenn tried to get a better rate from other insurers, he found that their rates were also high.

It turns out that eight insurance companies had requested Kenn’s driving data from LexisNexis over the course of a month.

Kenn’s story underscores the deep reach of data analytics into personal privacy and the financial impacts.

A Widespread Practice?

The collection of driver data is by no means limited to GM and LexisNexis.

• Verisk offers access to “multiple leading automakers that represent nearly 50% of new vehicle sales in the U.S.,” including GM, Honda, Hyundai, and Ford. They offer “telematics data from millions of connected vehicles.”
• Honda and Acura has a Driver Feedback system that scores your driving habits. The companies share driving data with insurance companies through Verisk.
• Mitsubishi has a phone app that gives “journey feedback and a score based on how smoothly and safely you are driving.” Mitsubishi uses LexisNexis to provide driving data to insurance companies.
• Kia has a Driving Score system that monitors driving and can impact insurance premiums. Kia uses LexisNexis to provide driving data to insurers.
• Hyundai also has a Driving Score system that it says can effect your insurance premiums. Hyundai uses Verisk to provide driving data to insurance companies.
• Ford has filed a patent application for a method to analyze driving data to determine insurance premiums. Ford uses Verisk to provide driving data to the insurance industry.

Clearly, vehicle telematics privacy is a significant matter that’s here to remain. As technological advancements continue, safeguarding privacy will become even more important.

Unveiling the Benefits of Vehicle Telematics: Revolutionizing the Road

Vehicle telematics is like a superhero gadget for cars.

It blends GPS technology, vehicle diagnostic tools, wireless devices, and vehicle “black box” systems to capture and send out information about the car.

Vehicle telematics can transform our driving experience by merging telecommunications and vehicle technologies.

Some ways that vehicle telematics can elevate your driving experience include:

• Seamlessly connecting with hands-free calls and music streaming.
• Optimizing your route, cutting down on travel time and conserving fuel.
• Accessing innovative car apps, such as remote vehicle control that enables features like remote start, lock/unlock, and climate control adjustment.
• Real-time diagnostics, where your car can alert you to potential issues before they worsen, acting like a 24/7 mechanic.
• Automatic crash notifications, directing help to your location instantly.
• Location-based services, helping you find a nearby gas station, parking lot, or restaurant.

Vehicle telematics provides technology and convenience at your fingertips. It can transform every drive into a smarter, safer adventure.

The Double-Edged Sword: Privacy Concerns

While telematics offer improved safety and convenience, there are significant vehicle telematics privacy concerns.

The detailed tracking capabilities extend beyond simple vehicle diagnostics. They also encompass precise locations, driving patterns, and even our behavioral habits.

This depth of data collection presents a double-edged sword: while it offers unprecedented levels of convenience and safety features, it also opens the door to potential privacy invasions, unauthorized surveillance, and data breaches.

Simply put, your car can record tons of information about what are you doing, and then send that information to third parties.

A significant concern arises when — like in Kenn’s case — drivers are not aware of the extent of information being collected or how it’s used by third parties, including insurance companies, marketers, and even law enforcement.

Driving Data: How Vehicle Telematics Shapes Insurance Premiums

Vehicle telematics privacy is especially important when it comes to driving data because such information enables insurance companies to use personalized pricing — charging a premium based on your specific driving habits.

Insurers use driving data collected by the vehicle to assess risk more accurately. Safe driving behaviors, like steady acceleration and adherence to speed limits, can lead to lower premiums.

Conversely, behaviors that are considered risky, such as hard braking and rapid acceleration, can increase insurance rates.

This shift towards insurance based on driving habits offers potential savings for conscientious drivers. But it also introduces concerns about vehicle telematics privacy and data security.

The Need for Clear Communication and Legal Safeguards

Kenn’s experience of unexpected premium hikes based on his driving data illustrates the need for transparency, consent, and safeguards in how vehicle telematics information is used.

When drivers buy vehicles equipped with advanced technology systems, they expect improved safety, navigation, convenience, and maintenance.

But the extent to which their driving data or other habits is collected, stored, and shared is not always made explicit.

According to the New York Times, some GM customers were tracked and their insurance rates went up even though they did not turn on the tracking feature (OnStar Smart Driver). And even those people that opted in to the feature may not have been properly warned that their driving data would be shared with insurance companies.

Clear Communication

Companies must prioritize clarity and communication, ensuring that drivers are fully informed and empowered to make decisions about the collection and use of their personal data.

Without a warning or disclosure, a car buyer would have no idea that the details of their driving habits will be shared with third parties.

After drivers are clearly and fully informed, they should have to explicitly opt-in and agree before driving data is collected or transmitted to third-parties.

It’s important that drivers are able to use all the technologies available in their cars without being forced to share their driving data. Sharing data should always be optional.

And driving data should never be shared unless a driver is clearly informed and explicitly agrees. Data sharing should never be a surprise.

Without clear communication regarding the purposes and implications of data collection, drivers may unknowingly relinquish control over their personal information.

As we saw in Kenn’s case, clear communication and opting in is especially important when it involves the sharing of driving data between car companies and insurance providers because it can affect insurance premiums.

Legal Regulations and Ethical Guidelines

Collection, Use, and Sharing

As technology continues to evolve, so too must the legal and ethical guidelines that govern the collection, use, and sharing of driving data.

Without adequate legal safeguards in place, there is a risk that driving data could be used to unfairly penalize drivers.

And remember that vehicles can collect much more than just driving data. The various data collected by vehicles could also be used to discriminate based on factors such as age, gender, or socio-economic status.

It is important that drivers have the right to fully understand and consent to the terms of data collection, as well as the ability to opt-out if they so choose.

Security and Anonymization

Additionally, legal measures should be implemented to ensure that companies protect the security and anonymization of driving data. This will further help to protect the privacy and rights of individual drivers.

Only through transparent communication and robust safeguards can we harness the potential of vehicle telematics while protecting the rights and privacy of drivers.

Tips for Protecting Your Vehicle Telematics Privacy

Here are some things you can do to protect your driving data:

• Review your vehicle’s infotainment settings. The infotainment system in your car or truck may include privacy and data collection settings.
• Review App settings. Apps you are using in your vehicle may have settings for privacy and data collection.
• Review terms and conditions. Review any terms and conditions that are included with your infotainment system or your Apps. See if they talk about data sharing or about enrolling you in any programs.
• See what data your vehicle can collect. This website offers data on what data a car or truck can collect.
• Contact your vehicle manufacturer. Request information that your car or truck company has about you. You can try an online search with “privacy request form” and the name of the manufacturer.
• Contact third-party customer support. Check with customer support at any third-party services that you know are connected to your vehicle, such as OnStar.
• Get your LexisNexis report. Get a copy of your LexisNexis Consumer Disclosure Report.
• Get your Verisk report. Get a copy of your Verisk report.

Empowering Drivers in the Digital Age

In the digital age, the advancement of connected vehicles brings to light the critical importance of vehicle telematics privacy.

As we navigate through this era, it’s paramount that drivers become well-informed and proactive guardians of their telematics data.

This article has aimed to equip you with knowledge and tools to help you safeguard your vehicle telematics privacy effectively.

By engaging with the provided resources, from obtaining comprehensive data reports to scrutinizing in-car settings, you can take control of your digital presence on the roads.

Embracing these practices not only empowers you as a driver but also contributes to shaping a future where technological progress and privacy rights travel hand in hand.

About Studnicki Law Firm

At Studnicki Law Firm, we focus on representing individuals who have been injured and their families. Adam Studnicki, a graduate of Harvard Law School, has over 30 years of experience in handling complex injury cases. If you or a loved one has been injured in accident, please contact us 24/7 for a free consultation or case evaluation.