In March 2024, the New York Times broke the story that car companies had begun collecting information directly from internet-connected vehicles for use by the insurance industry.
Safe driver schemes – where insurance companies offer a program for drivers to install a tracking dongle on their car and receive discounts or other incentives for fulfilling specific safe-driving practice criteria – have been around for some time.
What the NYT described was something different: detailed driving data had been collected by General Motors (GM) automatically through its OnStar service. This data had been shared with global data brokers LexisNexis and Verisk, who in turn provided it to insurance companies to set personalized rates – without clearly informing, or gaining explicit consent from, drivers.
In the wake of immediate and intense backlash, GM announced in April that it had ended the program, and has continued to update and reform its privacy policies and data collection practices through at least September.
Meanwhile, California’s privacy regulator and US Senator Edward Markey have launched investigations into the data collection practices of automakers. As of November 2024, some 32 lawsuits have been filed against GM, OnStar, LexisNexis and Verisk in relation to data collection.
How Could This Impact You?
Any car equipped with internet connectivity is capable of monitoring and reporting on driving habits and details. As just about all modern cars are internet-connected, the vast majority of US drivers are in a vehicle that could be used to track their driving.
This type of data collection and sharing, called telematics, is largely unregulated – and broadly legal. As of 2023, only around 15 states had even considered legislation that mentioned telemetrics, and only 3 had adopted regulations that related to telematics in some way.
Significant gray areas exist, and it is largely up to individual car manufacturers and dealerships to decide what sorts of information they collect, who they share it with, and how transparent they are with their customers.
Bottom line, you are likely driving a car that’s capable of tracking your actions, but there is no guarantee that it is – and no straightforward way to tell whether it is or isn’t.
Why Did This Even Happen in the First Place?
With replacement costs surging during the pandemic, and claim frequencies and miles driven soaring after it, today’s sky-rocketing premiums were widely anticipated in the industry.
As far back as December 2022, Verisk’s Jeff Piotrowski was speculating that so-called usage-based insurance (UBI) was about to enter a “golden age” as insurers scrambled to find ways to lower costs.
Presented as a “win-win” for insurers and consumers alike, advocates asserted that “consumers are likely to discard their hesitancy about sharing data” as costs continue to rise.
Where Do We Go From Here?
Although GM has shut down the OnStar program and at least a few regulators have turned a more critical eye to the topic, there is currently no reason to believe that the scandal will have a permanent chilling effect on the push for UBI.
Prior to the OnStar scandal, at least one market research firm was projecting that the usage-based insurance market would reach $77 billion by 2031, and experts were predicting that the concept would expand into other types of insurance, such as property, commercial fleet, health and life insurance.
At least one academic has made the claim that the widespread use of UBI could lead “robust” gains in road safety as individuals change their driving behaviors.
Meanwhile, Ford’s patent for a technology that would allow vehicles to track, photograph and report the speed of surrounding cars to the police continues to make its way through the US Patent and Trademark Office.
What Can You Do?
Check Whether Your Vehicle Is Affected
If you’re concerned about your car potentially tracking your driving habits, here are some steps you can take:
- Check your connected car app: See if you’re enrolled in any driver monitoring programs and opt-out if desired.
- Review your car’s privacy policies: While lengthy and time-consuming, understanding these documents can help you know what data is being collected.
- Request your data reports: Obtain your LexisNexis and Verisk reports (the two main data brokers) to see what information they have on you.
- Use a privacy tool: Check out the Vehicle Privacy Report tool to understand what data your car is capable of collecting.
Educate Yourself About the Topic
- Resources from the insurance industry
- Policy updates from state & federal agencies:
- Insights from global data brokers:
- Resources from consumer advocacy groups:
- Academic resources:
- Media Reports & Updates
Contact Your Representative
If you are concerned about user-based insurance, the proliferation of telematics, or anything else discussed here, reach out to your state and national representatives.
Important Note: This blog post is for informational purposes only and should not be considered legal advice.
