Auto insurance costs are spiking and it may be because drivers are being spied on by automakers who are sharing data with insurance companies.

A New York Times report is exposing the collection practice that not only results in rate increases but also the termination of certain policies. As reporter Kashmir Hill puts it, “Your car is a smartphone with really comfortable seats.”

“The New York Times reported this week that car manufacturers like General Motors and Ford are tracking drivers’ behavior through internet-connected vehicles, and sharing it with data brokers such as LexisNexis and Verisk, which create ‘consumer disclosure reports’ on individuals that insurance companies can access,” Fox Business reported.

“The consumer reports do not show where a driver has traveled, but they do provide information on length of trips and driving behavior, such as ‘hard braking,’ ‘hard accelerating’ and speeding. Insurance companies can use those reports to assess the risk of a current or potential customer, and adjust rates or refuse coverage based on the findings,” the media outlet added.

(Video Credit: CNBC Television)

According to the New York Times, one driver named Kenn Dahl, 65, who leased a Chevrolet Bolt, found out that he and his wife’s driving habits were being spied on when an insurance agent informed him in 2022 that his premium had jumped 21% because of his 258-page LexisNexis report. Eight separate insurance companies had requested the report.

“It felt like a betrayal,” Dahl told the Times. “They’re taking information that I didn’t realize was going to be shared and screwing with our insurance.”

The media outlet reported that automakers and data brokers claim that they only collect data from customers with their consent, but that doesn’t seem to be the case in many instances. What actually happens is that drivers sign off on a disclosure without realizing they are consenting to being spied upon. They don’t read the fine print.

“A Mozilla report from September of last year sounded the alarm over auto manufacturers’ privacy policies, and pointed to carmakers sharing drivers’ data with insurance companies and law enforcement, as well as a slew of other concerns,” Fox Business noted.

Automakers Are Recording Your Driving Habits & Then Selling Your Data To Insurance Companies Skyrocketing Your Insurance Rates

That’s Not The Worst Part, Report Shows “Smarter cars that have speakers and microphones, they collect your conversation data as well”

The guy in this… pic.twitter.com/fTWATKjJHE

— Wall Street Apes (@WallStreetApes) March 14, 2024

“Modern cars are surveillance machines on wheels souped-up with sensors, radars, cameras, telematics, and apps that can detect everything we do inside — even where and when we do it,” the report contended.

Mozilla is also warning that automakers sharing information with insurance companies might be optional currently, but could become “all-but-mandatory soon because of its widespread government support.”

“In 2022, LexisNexis put out a release about its Telemematics Exchange that mentioned the company had hosted data from over 10 million vehicles, with more than 60 percent of automakers ‘now engaged and expected to be integrated with data available for insurers by the end of 2022,'” Car and Driver reported.

Sen. Ed Markey (D-MA) got wind of the situation and sent a letter to 14 automakers requesting that they employ stronger privacy policies for customers. In February, he also asked the Federal Trade Commission (FTC) to look into automakers’ data collection practices.

With advances in vehicle technology, our cars store data on drivers, passengers, and individuals outside the vehicle—and automakers are vacuuming up this information. I’m urging @FTC to investigate automakers’ data practices and take action to protect road users’ privacy. pic.twitter.com/YTHwt6c10X

— Ed Markey (@SenMarkey) February 28, 2024

“With new advances in vehicle technology and services, automakers have been vacuuming up huge amounts of data on drivers, passengers, and even individuals outside the vehicle,” Markey wrote to Federal Trade Commission Chair Lina Khan.

“Based on public reporting and responses to my own inquiries into these practices, automakers face few, if any, limitations on the collection, use, and disclosure of this data,” he stated. “Consumers are often left in the dark.”

Ford is adamantly telling consumers that it is not participating in sharing data with LexisNexis or Verisk.

“Ford does not transmit any connected vehicle data to LexisNexis or Verisk,” a statement from the company claims. “We had previously announced exploratory partnerships with them for usage-based insurance (UBI) programs but they have never launched for customers.”

I put a “news you can use” box at the bottom of this one pic.twitter.com/Q3aQvUXsBy

— Kashmir Hill (@kashhill) March 11, 2024

“Consumers can find out what data their vehicle is capable of collecting by submitting the vehicle identification number (VIN) at https://vehicleprivacyreport.com/,” Fox Business reported. “Drivers may obtain their LexisNexis consumer disclosure report by requesting it at https://vehicleprivacyreport.com/, and Verisk reports may be requested at https://fcra.verisk.com/#/.”

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