Your Car May Be Tattling on You, Leading to Higher Insurance Rates

Picture yourself cruising down the highway in your dependable Chevy Bolt or Cadillac, relishing the seamless integration of modern technology that makes driving effortless. But consider this: your vehicle is silently gathering data on your every move behind the wheel, and this information could be the cause of your rising insurance rates. This isn’t a scenario from the future; it’s happening right now, and drivers are noticing.

“Opel OnStar” by opelblog is licensed under CC BY-NC-ND 2.0

Kenn Dahl, a Seattle-area businessman, experienced a 21% spike in his car insurance costs in 2022, and he’s pointing the finger at the data collected by GM’s OnStar Smart Driver system in his Chevy Bolt. According to a report by The New York Times, Dahl’s insurance agent cited a LexisNexis report, which tracked his driving behavior over six months, as the reason for the increase. The report detailed every trip, including instances of speeding, hard braking, and sharp accelerations.

Dahl’s story isn’t unique. A Cadillac owner from Palm Beach County, Florida, faced rejection from seven insurance companies and is now considering legal action against GM. His insurance woes were also based on a LexisNexis report that highlighted his driving habits. Both drivers were enrolled in the OnStar Smart Driver subscription service, which promises to help drivers become ‘smarter, safer’ on the road. Yet, they felt betrayed by the sharing of their data without explicit consent.

The issue extends beyond GM. Ford, Subaru, Mitsubishi, Honda, Kia, and Hyundai are also in the mix, with some offering similar data-sharing features. Verisk, a data analytics company, has accessed driver data from millions of vehicles, including those made by Ford, Honda, and Hyundai. However, Ford maintains that it only shares driver behavior data with insurance companies if the driver gives explicit consent.

The implications of this data sharing are significant. Car insurance tracking devices, whether plugged into your car’s onboard diagnostics or downloaded as an app on your smartphone, monitor your driving behavior and report it to the insurance company. This data can lead to adjusted premiums or discounts, but it can also result in higher rates for those deemed riskier drivers.

Usage-based car insurance (UBI) programs are on the rise, offering potential savings for safe or infrequent drivers. But before opting in, it’s crucial to understand how these devices work, what they track, and their impact on your rates. An insurance tracker, part of a telematics program, collects data on your driving habits, including speed, acceleration, braking, and more.

While these programs are optional and drivers can opt-out, the collected data can be a double-edged sword. It can lead to discounts for safe driving or, as seen in the cases of Dahl and the Cadillac owner, increased rates due to perceived risky driving behaviors.

Navigating this new landscape of connected vehicles and data-driven insurance policies, it’s essential for drivers to be aware of the terms and conditions they agree to. Transparency from car manufacturers and insurance companies will be key in maintaining trust and ensuring that drivers feel in control of their data and their wallets.

The road ahead is paved with data points that could either save you money or drive your insurance rates up. It’s a reminder that in the digital age, even our cars are part of the conversation—and sometimes, they’re talking about us when we least expect it.