Driving in this digital age goes beyond steering, braking, and accelerating; it involves technology, interfaces, and machines talking to each other. With cars becoming more connected and intelligent, the volume of data obtained from drivers and vehicles has increased enormously. While certain app-based features branded as progress aim to help individuals become more competent, reliable, and efficient drivers, the collected data may lead to users being classified as high-risk drivers, thereby inflating their insurance premiums. This piece explores this possibility and its implications for app-users, drivers, insurance companies, and automakers.
Data Collection and Automotive Technology
New cars, regardless of whether they’re electric vehicles (EVs) or not, have extensive data-collecting functionalities thanks to numerous onboard sensors. Automakers often argue these sensors can help improve driving skills and even secure lower insurance premiums if users accept data collection. However, these manufacturers also sell the compiled information to companies that develop risk profiles for customers, which insurance companies then use.
The Case of OnStar Smart Drive
A case study of this situation pertains to a Chevrolet Bolt EV driver who experienced increased insurance premiums because of a 130-page report based on his driving data dating back six months. General Motors shared this data with LexisNexis via the OnStar Smart Driver program, which generates feedback regarding good habits like seat-belt buckling and limiting abrupt acceleration, but appears to disregard context such as the type of road driven on and traffic conditions. Furthermore, insurance companies pay to access this data.
Consensually Sharing Driver Behavior
According to OnStar, “insights about driving behavior” are only shared with insurance firms with the customer’s “explicit consent.” Once consented, insurers can access a “driver score” produced by LexisNexis or Verisk. However, GM assures that it doesn’t have access to these scores. Other automakers like Kia, Mitsubishi, and Subaru reportedly contribute data to LexisNexis as well, but Subaru insists its input only includes odometer data. Additionally, data to Verisk is provided by Ford, Honda, and Hyundai.
Challenges Faced by EV Drivers
EV drivers aiming to procure lower insurance premiums by releasing their driving data face an uphill struggle. A finding by Consumer Reports in 2023 revealed that EVs cost substantially more to insure compared to gasoline cars, despite the fact that electric cars are less likely to be stolen. The ambiguity surrounding how databases would handle EV drivers utilizing solid regenerative braking settings in their cars, like Chevrolet Bolt’s one-pedal driving mode, or those utilizing the fast acceleration advertised by automakers is a considerable concern.
Data Security and Privacy
The security of any data transmitted from cars to data brokers should not be taken lightly. So far, cybersecurity advocates have concentrated on charging and over-the-air updates as probable entry points for cybersecurity or privacy violation. Consequently, for those who value their privacy and wish to avoid possible higher insurance rates, the best course of action might be to decline participation in these programs.