General Motors Caught Selling Driving Data to Insurance Companies
General Motors’ (GM) OnStar Smart Driver feature is advertised as giving insights on how one can become a safer driver. But it was not fully disclosed that this feature hands your driving information to a data broker who sells it to LexisNexis and Verisk — data analytics companies that happen to have a risk and solutions divisions.
These analytics businesses then supply this information to insurance companies.
In early March, The New York Times published an article about this issue. An owner of a Cadillac XT6 was stunned to find his insurance rate had increased by over 20%. The owner was unsuccessful in finding a better quote elsewhere, as his information had been already widely shared. When questioning the reason for the rate increase, an insurance agent told him his LexisNexis report was a variable.
The owner of the Cadillac XT6 reached out to LexisNexis and requested his report, which it must do under the Fair Credit Reporting Act. The 258-page “consumer disclosure report” was sent to the owner and completely shocked him.
The report had information about his driving, including his speed, how hard he braked and how fast he accelerated. LexisNexis described this as its way of analyzing driver data to formulate a risk score. This score is used to personalize an individual’s insurance coverage. About eight insurance companies requested this individual’s driving information a month prior to him finding out, as told by the spokesman for LexisNexis.
This isn’t the first time insurance companies had access to driving data. In the past, incentives were advertised to “help” drivers lower their insurance premiums by installing a dongle to their OBDII (On Board Diagnostic II) to collect safe driving data.
Progressive Insurance advertised this as its “snapshot” savings. But the company could also use the information to raise premiums if unsafe driving behavior was detected instead.
Insurance companies are now obtaining driving data without direct consent through internet connected vehicles – ranging across multiple brands.
Many of these vehicles are connected by way of a brand’s built-in application program, in GM’s instance their OnStar Smart Driver feature. These are primarily optional features that give driver feedback based on their telemetry. On the surface, it does not seem to have any ties with insurance companies, but that data is sold to the analytics companies. It’s similar to accepting website marketing cookies that track activities and history to sell an individual’s information.
Some GM owners stated they do not recall signing up for the OnStar Smart Driver and discovered their dealership signed them up without their consent. It was also found that dealers were paid bonuses for signing up customers. Since news broke out, a spokesperson for GM has stated OnStar Smart Driver data is no longer being shared with LexisNexis or Verisk.
In this modern world, privacy is a blurred line, unfortunately found in the fine print.
