Your car insurance provider knows more about you than you might realize, and it’s using that information to set your rates. According to a recent report by the New York Times, new cars with internet-enabled features are monitoring your driving habits. This data is then shared with data brokers, who sell it to car insurance companies.
This occurs regardless of whether the driver is aware of it. When you buy a new car these days, you may have the option to lower your insurance premiums by downloading an app that tracks how you drive—things like how sharply you brake or take corners. However, data collection happens whether you opt into these features or not.
The report highlights that major automakers, including General Motors, Ford, Kia, and Subaru, share this data with brokers like LexisNexis and Verisk. These brokers analyze the information and provide it to insurance companies, which then use it to determine a “risk score” for drivers. This score influences the rates that insurance companies charge.
While the news is not entirely surprising, it is certainly disappointing. Last year, Mozilla reported that cars are the “worst product category” they’ve reviewed in terms of privacy. Cars are not only tracking driving habits and location but also collecting sensitive data like biological characteristics, sexual orientation, sex life, and genetic information. All automakers are guilty of this practice, with Tesla being one of the worst offenders.
There is some movement toward regulating the kinds of data carmakers can collect. U.S. Senator Ed Markey (D-Massachusetts) recently urged the Federal Trade Commission (FTC) to investigate the data privacy practices of auto manufacturers. In his letter, Markey pointed out that there are currently insufficient limitations on how carmakers collect and use data, leaving consumers unaware and unprotected.
Markey emphasized that with advancements in vehicle technology and services, automakers are gathering massive amounts of data on drivers, passengers, and even individuals outside the vehicle. Public reporting and responses to his inquiries into these practices reveal that there are few, if any, boundaries on the collection, use, and sharing of this data, often leaving consumers in the dark.