Carmaker GM Accused of Providing Driving Data to Insurers, Raising Rates
Unfortunately, it has come to light that General Motors (GM) may have been providing driving data to insurers, which has resulted in increased insurance rates for many drivers.
According to a recent report by the New York Times, GM has been supplying driving data to data broker LexisNexis Risk Solutions. This data includes information on driving trips, such as distance, start and end times, and instances of speeding and harsh braking. The data is meant to be used by insurers to make more informed decisions when issuing auto insurance rates.
Romeo Chicco, a Florida man, has taken issue with this practice. When he tried to obtain auto insurance in December, seven different companies rejected him due to information in his LexisNexis report. When he finally obtained coverage, it was at a rate that was nearly double what he had been paying previously.
Chicco has filed a federal complaint seeking class-action status against GM and LexisNexis Risk Solutions for violations of privacy and consumer protection laws. The complaint alleges that the companies' actions have resulted in harm to consumers by affecting their insurance rates in a negative way.
It is important to note that automakers have been increasingly connecting cars to the internet, packing them with sensors and cameras, and even referring to them as "smartphones with wheels." This allows for the collection and sharing of data, but it is crucial that this data is used in a ethical and transparent manner, respecting the privacy and financial rights of consumers.
It will be interesting to see how this situation develops and if it will set a precedent for the handling of driving data in the future.
While the complaint against GM and LexisNexis alleges that driving data has resulted in higher insurance premiums, GM and LexisNexis have both denied these claims.
GM's spokesperson, Dan Flores, stated that the company "never sells personal information, including data related to insurance claims." He also assured that they inform customers about the data collection and sharing and that it is done to improve the overall safety and performance of their vehicles.
LexisNexis also denied any involvement in insurance rating decisions. A spokesperson commented that the company provides data to help insurers assess risk and prevent fraud but does not make any decisions regarding insurance rates.
These statements from GM and LexisNexis highlight the complexities of data sharing in the evolving automotive industry and emphasize the need for transparency and clear consumer communication.
As technology continues to advance, it will become increasingly important to address privacy concerns and establish clear guidelines for the use and handling of driving data. Ensuring consumer consent and fairness in the insurance pricing methodologies will be critical going forward.