Drivers concerned as automakers share driving data with insurance companies
What's the story
Automobile manufacturers, including General Motors, are sharing detailed driving data of their consumers with insurance companies.
This information includes instances of speeding, hard braking, or rapid acceleration during each trip.
LexisNexis, a global data broker based in New York, generates risk profiles for insurers using this data.
The practice has raised concerns among drivers who were unaware that their driving behavior was being monitored and shared.
Premiums surge
Impact on insurance premiums and consumer reactions
The sharing of driving data has led to significant changes in insurance premiums for some drivers.
For instance, Kenn Dahl, a software company owner, and Chevrolet Bolt driver, experienced a 21% increase in his car insurance cost in 2022.
He was informed by an insurance agent that his LexisNexis report played a role in this hike. Many drivers like Dahl are surprised to learn about the extent of data being shared with insurers.
Content
Detailed driving data in consumer disclosure reports
Upon request, LexisNexis provides consumers with a detailed "consumer disclosure report" as per the Fair Credit Reporting Act.
Dahl's report, for example, was 258 pages long and included over 130 pages of driving data from the past six months.
It documented 640 trips with details such as start and end times, distance driven, and instances of speeding or hard braking. However, it did not include information about where the car had been driven.
Modus operandi
Role of automakers and insurance companies in data sharing
The driving data included in the consumer disclosure reports is provided by automakers, such as General Motors.
LexisNexis then analyzes this data to create a risk score for insurers.
According to Dean Carney, a LexisNexis spokesperson, this score is used "as one factor of many to create more personalized insurance coverage." In the previous month alone, eight insurance companies had requested information about Dahl from LexisNexis.
Ethics
Concerns over privacy and transparency in data sharing
The practice of sharing detailed driving data with insurance companies has raised concerns among consumers.
Many drivers, like Dahl, were unaware that their driving behavior was being monitored and shared.
This lack of transparency about the extent of data collection and its use in determining insurance premiums has led to questions about privacy rights and the need for clearer disclosure from automakers and insurance companies.