Big Insurance is Spying on You

New technologies frequently impact our privacy rights and the security of our data. From smartphones to social media, the landscape of data privacy is evolving every day. However, when it comes to personal data, most folks don't consider the fact that their new car may be a source of data generation, storage, and even transmission... until now.

Recently, The New York Times highlighted a crucial issue regarding how modern cars collect and share data with insurance companies. Many drivers are unaware that their vehicles are equipped with systems that can track detailed driving habits and share this information, often without explicit or clear consent.

When you buy a new car or download certain mobile apps, you may unknowingly agree to data sharing via any available internet connection. This data can include everything from odometer readings to detailed driving behaviors. Car manufacturers use various terms for these programs, such as Toyota's “Insure Connect” or Honda’s “Driver Feedback,” making it challenging for consumers to recognize when they are opting in.

Why it Matters

The implications of data sharing is significant. Insurance companies may use personal data to adjust premiums, which could lead to higher costs based on individual driving habits. This data might also be shared with others, including data brokers, further eroding your privacy. Beyond the apparent data privacy risks, the advent of "connected" cars and trucks raises two very important questions:

1. How would my insurance company know who is driving my car?         

2. Is my personal data secure?        

Who is Driving?

Currently, there is an open question regarding the accuracy of data collected by automakers, insurance companies, and/or data brokers. Specifically, it is unknown whether these entities are even capable of distinguishing between when a person is driving versus when they are a passenger. This ambiguity raises concerns about the fairness and accuracy of data used to calculate insurance premiums. Despite advanced algorithms, determining whether data reflects the actions of the owner of the vehicle remains a challenge, even for telematics providers. According to Sentiance, a self-described "leader in motion insights:"

... not every car trip should be aggregated into the user profile. Being a passenger of a reckless taxi driver shouldn’t penalize your driving profile.

Many consumers agree, adding to the growing threats posed by mass data collection -- a list that includes data breaches and other instances of fraud.

The Growing Threat of Data Breaches

Experts note massive risks associated with data breaches at a time when data-enabled cars and trucks are on the rise. As cars become more connected, the data they collect becomes a valuable target for hackers. Personal information, driving habits, and location data are valuable assets for cybercriminals. A breach could expose sensitive information, leading to identity theft, fraud, and other malicious activities.

Car manufacturers and insurance companies must implement robust cybersecurity measures to protect this data. However, history has shown that even well-protected systems can be vulnerable. High-profile data breaches in various industries have demonstrated that no system is entirely secure.

For consumers, this means being proactive about data security. Regularly update your car’s software, use strong, unique passwords for associated apps, and be cautious about the permissions you grant. Additionally, stay informed about any reported vulnerabilities or breaches related to your vehicle.

Case Study: GM and LexisNexis Class Action

In a recent class action lawsuit, GM and LexisNexis face allegations of privacy breaches due to their telematics data collection practices. The case, brought by Romeo Chicco, highlights the unexpected consequences of data sharing.

There, Chicco discovered his insurance premiums had doubled due to detailed driving data collected without his clear consent, leading to a legal battle over privacy and consumer rights. Chicco's 2021 Cadillac XT6 transmitted data to LexisNexis through GM's OnStar Smart Driver program, which he claims he never knowingly enrolled in. This data, including specifics on his driving habits, was used by insurance companies to adjust his premiums.

Ultimately, the lawsuit underscores the importance of transparency and consent in data collection practices, as well as the potential for significant financial impacts on consumers.

What Can I do About it?

To protect yourself, start by checking the data privacy settings in your car’s app, infotainment system, and mobile apps which have data tracking abilities. Look for any options related to "data sharing" or "driver scoring" and, if need be, opt out where possible. It’s also wise to file a privacy request with your car manufacturer to see what data they have collected about you.

For those who have accidentally opted into these programs, contacting your insurance company to understand how this data affects your premiums is crucial. In states with consumer data privacy laws, you have the right to access and control your data, so take advantage of these protections.

Ultimately, while these steps can help mitigate some privacy concerns, stronger consumer protection laws are needed to ensure our data is handled responsibly and transparently. As this technology continues to evolve, staying informed and proactive is essential for safeguarding your privacy and finances. For more detailed guidance on managing your car’s data sharing, check out resources including the Electronic Frontier Foundation’s Guide at https://www.eff.org/deeplinks/2024/06/how-figure-out-what-your-car-knows-about-you-and-opt-out-sharing-when-you-can.

Stay safe and informed on the road!

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