Car manufacturers are sharing driving data with insurance companies through data broker firm LexisNexis, which is then used to adjust insurance premiums. The data being gathered does not accurately determine a driver’s safety and should not be the sole basis for adjusting insurance rates.
The Troubling Reality of Car Data Tracking and Insurance Premiums
In recent news, car manufacturers have been sharing driving data with insurance companies through data broker firm LexisNexis, which is then used to adjust insurance premiums. This practice raises concerns about privacy and the accuracy of the data being collected.
( Credit to: Theautopian )
One of the most alarming aspects of this data collection is that it does not accurately determine a driver’s safety and should not be the sole basis for adjusting insurance rates. Let’s delve deeper into the troubling reality of car data tracking and its impact on insurance premiums.
( Credit to: Theautopian )
The Collection and Sharing of Driving Data
Connected car applications like GM’s Smart Driver have been tracking various metrics such as distance driven, average speed, hard acceleration, hard braking, and late-night driving. However, owners are often unaware that this data is being collected and shared with third-party organizations like LexisNexis.
Recently, a Reddit user from Colorado shared their experience of receiving a letter from LexisNexis disclosing their driving data, including date, time, distance, VIN, and events such as acceleration, hard braking, and high speed. It was revealed that GM was sharing this data without the owner’s explicit knowledge, raising concerns about privacy and consent.
The Gamification of Driving Data
GM’s Smart Driver app gamifies the driving experience by allowing car owners to view their driving data and a computed “driving score.” However, what car owners may not realize is that this data is being shared with insurance providers and could potentially lead to increased insurance premiums.
While the app encourages drivers to aim for higher scores, these scores do not accurately reflect a driver’s safety. The gamification aspect of the app can be misleading, as it does not indicate that the data is being used to adjust insurance rates.
The Flawed Metrics
The metrics used in these driving scores fail to consider the real-world driving situations in which a driver may find themselves. For example, the “hard braking” metric penalizes drivers for sudden braking incidents, without considering that hard braking may be necessary to avoid accidents or hazards on the road.
Similarly, hard acceleration may be required to merge onto fast-moving highways or respond swiftly to unexpected situations. Even the “Late Night Driving” metric is flawed, as some people work night shifts and may have valid reasons to drive during those hours. Average speed can also be misleading, especially for drivers who predominantly use highways with higher speed limits.
The Lack of Driver Benefit
It is important to recognize that these driving scores and data collection practices are not designed for the benefit of the driver. Even if the driving score were displayed in real-time on the car’s dashboard, it would not be helpful because the score itself is meaningless.
The data collected and shared with insurance providers primarily serves their interests rather than improving driver safety. This raises questions about the fairness and transparency of using this data to adjust insurance premiums.
A Safer Alternative
If insurance companies genuinely aim to promote safety, they could focus on addressing distracted driving, which is a significant threat on the roads today. One potential solution could be utilizing a car’s Bluetooth capabilities to pair with the driver’s phone upon entry, disabling non-emergency phone usage and allowing only essential functions like navigation and emergency calls.
Drivers who opt into such a program could receive reduced premiums as they demonstrate a commitment to avoiding distractions. This approach would prioritize real-world safety concerns rather than relying on arbitrary metrics that may not accurately reflect a driver’s risk on the road.
Conclusion
The practice of car data tracking and its use in adjusting insurance premiums raises significant concerns about privacy, fairness, and the accuracy of the data being collected. While connected car applications may offer convenience and gamify the driving experience, the metrics used to determine driving scores are flawed and do not reflect real-world driving situations.
If insurance companies truly want to promote safety, they should consider alternative approaches that address distracted driving and prioritize real-world safety concerns. Ultimately, safe driving should be based on actual behaviors and circumstances, rather than relying solely on data-driven scores that may not accurately represent a driver’s risk on the road.
