What our cars whisper to insurance companies
An in-depth analysis by the New York Times reveals that car manufacturers such as General Motors, Honda, Kia and Hyundai collect information on driver behavior using opaque methods and then share it with insurance companies that increase their rates. All the details
The issue is currently all-American but an investigation by the New York Times has discovered that some car manufacturers are collecting information on consumers' driving habits directly from vehicles. This is all kinds of information, from how much the driver drives to how fast he takes turns, how hard he brakes and whether he accelerates. All these details are then transmitted to the insurance companies, who use them to propose their plans to customers, who are often unaware that they have given their consent because it was obtained in less than transparent ways.
THE DATABASE
One of the interviewees heard by the NYT said that he had always considered himself a careful driver, who had never had an accident in his life, yet in 2022 the cost of his insurance increased by 21% and the quotes from other insurance companies were also strangely tall. The reason was explained to him by an insurance agent, who told him about a report describing his driving habits.
The document, shared with insurance companies, was created by LexisNexis, a global data broker based in New York, which has a Risk Solutions division dedicated to the auto insurance industry and which tracks accidents and fines. There were over 130 pages in the report describing every time he or his wife had driven their leased electric car in the previous six months. There were the dates of the 640 trips, the start and end times, the distance traveled and a report of any speeding, braking or sudden acceleration. The only thing that didn't appear was where they had driven the car.
According to the report, the trip details were provided by General Motors, the manufacturer of their vehicle.
THE CAR MANUFACTURERS INVOLVED
But this testimony is just one of many cases and General Motors is not the only car company to be involved. The NYT has in fact discovered that Honda, Kia and Hyundai also used questionable techniques to collect information on owners.
THE QUESTION OF CONSENT
Sometimes the collection of information occurs with the knowledge and consent of the driver, but in other cases everything is much murkier. On the one hand, in fact, there is a scheme whereby car manufacturers have established relationships with insurance companies, so that if consumers want to take out a particular type of insurance, in which the rates are established based on the monitoring of their driving habits driving, it's easy to collect data wirelessly from their cars.
On the other hand, however, there are more "sneaky" methods. In fact, as the NYT explains, modern cars are Internet-enabled and allow access to services such as navigation, roadside assistance and car apps that drivers can connect to their vehicles to locate or unlock them remotely. And in recent years, automakers have begun offering optional features in their connected car applications that evaluate users' driving.
However, some drivers may not realize that by turning on these features, they are providing information about their driving behavior to data brokers like LexisNexis.
WHAT THE CAR MANUFACTURERS SAY
“The automakers and data brokers who have partnered to collect detailed data on the driving of millions of Americans say they have permission from motorists to do so – we read in the NYT -. But the existence of these partnerships is all but invisible to drivers, whose consent is obtained through a series of fine print and obscure privacy notices that few read.”
And it doesn't end here because some motorists, driving vehicles produced by General Motors, claim to have been tracked even when they had not activated one of these functions and have therefore encountered higher insurance rates.
Car manufacturers obviously make it a matter of consumer safety but in reality, as some experts have observed, if people don't know that their driving style will affect the cost of insurance, then there can be no benefit to public safety . And indeed, this way of acting risks penalizing drivers who could be labeled as "risky" based on opaque and questionable criteria.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/quello-che-le-nostre-auto-sussurrano-alle-compagnie-assicurative/ on Sat, 16 Mar 2024 06:23:55 +0000.