Automakers, Insurance Companies, And Apps Are Non-Transparently Spying On Your Driving Habits And Hiking Your Insurance Rates
In 2023, Mozilla released a report noting that modern cars had theworst security and privacy standards of any major technology industry the organization tracks. That was followed by a great NYT report by Kashmir Hill earlier this year showing howautomakers routinely hoover up oodles of consumer driving and phone info, then sell access to that data to auto insurance companies.
Originally, Hill found that GM was collecting both driver behavior and phone data, selling access to LexisNexis, which, in turn, sold access to insurance companies. Insurance companies then used that data to raise rates on the worst drivers - but also to non-transparently justify raising rates on everybody (trust us, we have insider data we won't show you indicating you should be paying significantly more.").
Since nobody in this chain is being transparent about it, GM is now facing dozens of different lawsuits.
But Hill has found a thread and just keeps pulling. Her latest report on automakers documents how auto insurance companies are still gleaning data from apps on your phone that already have a problematic history on privacy and location tracking. Such as Life360, which was caught a few years ago funneling sensitive user location data to a broad number of barely regulated and extremely dodgy data brokers.
And they're still doing it without being particularly clear with consumers, who routinely seem shocked when they learn the scope of the practices:
No one who realizes what they're doing would consent," said Ms. Lomax, who canceled her subscription.
Auto insurance companies can buy detailed consumer behavior and location data from automakers, telecoms, app makers, or data brokers. And because the U.S. is too corrupt to pass a meaningful modern privacy law, or even implement some basic regulatory guardrails for data brokers, the whole thing has devolved into a privacy shitshow where we get at least one major scandal a week. And those scandals are getting progressively worse and more dangerous the longer the issue goes unchecked.
Companies in Hill's stories can claim they're being transparent or not sharing your data, but intentionally boxed in regulators like the FTC lack the resources or staff to police these issues at the scale they're happening, so it's not like anybody is consistently following up to make sure. Consumers generally have absolutely no idea they're being closely monitored and how this data can be used against them, and companies often see little punishment outside of some brief public shaming to rein in bad behavior.
If this was all properly regulated and entirely transparent, there could be a future where everybody has a openly calculated driver score, and you technically pay lower rates for auto-insurance based on very clear metrics. Hill's piece flirts with how more accurate, personalized driving and behavior data could prove particularly helpful for marginalized people harmed by current insurance practices that unfairly discriminate based on stuff like education level or credit scores.
But we're talking about private companies motivated to pursue quarterly revenue bumps regardless of reality or ethics. Consumer advocates worry insurance companies are incentivized to use more detailed user behavior data not to improve things, but to justify entirely new bad decisions, like charging people who work the night shift more money because they drive at night.
A cornerstone of exploiting improved data collection to boost quarterly revenues will continue to be making sure the collection and analysis isn't transparent to the public.
At some point there will be significant reform and a (hopefully) well crafted new federal law governing all of this, probably only after there's a massive, unprecedented scandal. But right now it's extremely difficult to get these companies to even be entirely honest about what they're even doing.