All kinds of popular features, such as in-car apps, remote functions, and even Wi-Fi hot spots, are available on most new vehicles that offer internet services. In addition to being a goldmine of data for automakers, these "connected" cars can also serve as a goldmine for insurance companies as well. An article published in the New York Times this week discussed the extent to which tracking driver information can affect insurance rates, as well as how it may affect driver insurance rates. 

The insurance industry has in recent years provided incentives to consumers who install dongles in their cars or download smartphone apps that allow them to monitor a variety of things, including how much they drive, how fast they turn corners, how hard they hit the brakes, and whether or not they speed when driving. 

A patent application by Ford Motor describes how “drivers are traditionally reluctant to participate in such programs,” but instead, car companies are collecting information directly from internet-connected vehicles for use by insurance companies. This is the opposite of what's happening now. As far as tracking users' driving data regarding car insurance adjustments is concerned, it is not a new concept at all. 

If users prove that they are good drivers, they can often reduce their insurance premiums, normally by letting their insurance company track users' vehicle data such as trips taken, speeds, distance driven, etc. This is a way that the insurer will be able to lower users' premiums. Certainly, there is a significant difference between tracking of that type and what is emerging about the Smart Driver from General Motors. 

There are a lot of direct insurer tracking programs that help consumers save money on their bills, but Smart Driver is not a user's typical tracking program, most of its users are not knowingly entering into such an agreement seeking savings; in Smart Driver's case, as well as the way data is transmitted to insurers, the consent is not nearly as clear as it might seem. GM's "connected" services, OnStar Smart Driver, are known to share driver data with other auto manufacturers. 

According to Car and Driver, it was not surprising that other automakers also had a similar data-sharing program. The idea is fine when automakers effectively notify consumers that their data will be tracked and shared with others. A usage-based insurance policy entails that the insurance company monitors the behaviour of the driver to determine the best policy. 

There is a problem with the growing number of internet-connected vehicles that share the personal information of their drivers without these drivers even being aware that they have consented to this practice. Kenn Dahl says he has always been able to drive safely because he was careful as a child. In addition to driving a leased Chevrolet Bolt, he owns a software company near Seattle and owns one of its employees. Neither he nor anyone else in his family has a history of causing accidents. 

The cost of his auto insurance shot up by 21% in 2022, and Mr Dahl, 65, was shocked when he received a bill for a hike of such proportion. It was also not uncommon to receive high insurance quotes from other insurers as well. The insurer told him it was the LexisNexis report that he had on file that was a contributory factor.

It is important to understand that LexisNexis is a global data broker with a stake in the insurance and auto insurance industries and is known for keeping tabs on traffic accidents and speeding tickets in the automobile industry. LexisNexis sent Mr. Dahl his 258-page "consumer disclosure report" at his request as per the Fair Credit Reporting Act, which it is required to provide to customers under the law. 

Typically, someone will agree to the terms of service when they install or update an app on their smartphone, but they need to read the fine print before accepting these terms before installing or updating the app on their smartphone. Even though consumers are advised to carefully read contracts before agreeing to them, there is also a powerful argument that corporations must be transparent as to how and when their personal information is going to be shared with others.

This is why the California Privacy Protection Agency (CPPA) has enlisted the help of its Enforcement Division to investigate how and to what extent automobiles equipped with features such as location sharing, smartphone integration, web-based entertainment, and cameras could collect and share consumer data with others, according to a report from Reuters. 

The apprehension echoed by the US Department of Commerce regarding the prospective national security threats posed by Chinese electric vehicles (EVs) finds a parallel in the contemporary discourse surrounding the management of data about driving behaviour in "connected" automobiles.

Individuals keen on understanding the handling of such data by their vehicles are advised to diligently examine the privacy policies associated with any car applications they utilize. Additionally, consumers may avail themselves of consumer disclosure reports provided by LexisNexis, as mandated by the Fair Credit Reporting Act overseen by the Federal Trade Commission.