‘Always on’ connected services are a way of life in new cars: And it may end up costing you in hidden ways.

On Monday, the New York Times published a report calling out automakers for sharing customer driving behavior directly with insurance companies. Through manufacturers making the telematics data they collect through connected apps available to third-parties, insurers may be using customers’ information to hike rates — at least according to some owner’s claims.

Of course, this type of data collection is nothing new, as certain insurers offer potential discounts if you opt-in to a device monitoring your driving habits. The nature of today’s story covers the potential for less transparent collection policies where customers may not know certain data could ultimately be shared with insurance companies. For example, Progressive offers its Snapshot program to “reward good driving behavior” for which drivers must enroll themselves, though it can raise your raises if it catches you engaging in risky behavior. Tesla also offers its own insurance option in which customers must opt into having their driving behavior tracked.

The NYT piece specifically drew attention to General Motors’ OnStar system. Its optional “Smart Driver” service, a free add-on to several OnStar subscription plans, tracks driving habits and provides insights to become a “smarter, safer driver”. While the company does say it collects “specific driving behavior data, including hard braking events, hard acceleration events, speeds over 80 miles per hour, average speed, late-night driving, when a trip occurs and the number of miles driven,” it does not disclose that telematics information may end up in third-party databases like LexisNexis, which insurance companies can access.

Today’s report goes as far to link automakers’ collected data to insurance companies only through customer opt-in features. However, some owners of high-performance GM models told the outlet that insurers targeted them for rate hikes after taking their cars to the track while the OnStar connected services suite was active.

The information sharing is not strictly limited to performance cars, either.

The NYT piece profiles one Seattle-based driver leasing a Chevrolet Bolt. After seeing his car insurance jump 21% in 2022, one insurance agent mentioned his LexisNexis report was a contributing factor. He pulled a 258-page LexisNexis”consumer disclosure report” under the Fair Credit Reporting Act that detailed 640 trips, including accounting of any instances of speeding, sharp accelerations or hard braking. According to the LexisNexis report, General Motors had provided the data, and eight insurance companies requested that owner’s data over the past month.

When approached for comment, a company spokesperson reiterated that the OnStar Smart Driver service is optional to customers, and that they may unenroll at any time. Still, NYT features writer Kashmir Hill notes there is no immediately clear disclosure within the OnStar app that driver data may go to third parties for insurance parties to access. Some drivers to whom the outlet spoke also said they “opted-in” to the service without their knowledge, and that dealership paperwork made no mention of the service when they purchased their GM vehicle.

The automaker further confirmed it does share “certain insights” from Smart Driver to data brokers working with insurance agencies, including LexisNexis and Verisk.

For its part, OnStar’s privacy statement does say it may “share your information within GM, with automotive dealers, licensees, and companies with whom we inter into business relationships, in order to develop, enhance, provide, service, maintain, and improve the safety, security, and quality of our products, programs and services, to respond to your requests, to allow recipients to use it for marketing, and as required and permitted by law.” As far as third-party relationships, the privacy statement mentions marketing activities “with necessary consents) or where you have elected to receive a service or authorized them to collect data from GM, such as usage-based insurance providers who calculate rates based on mileage driven. It does not specifically mention sharing driving information to databases accessible by insurers in the process of calculating premiums. The statement notes SiriusXM as a specific example of third-party data sharing, but not data brokers.

Other automakers acknowledged contributing to LexisNexis’ “Telematics Exchange”, but in a more limited capacity. Subaru’s StarLink service, for example, only shares odometer data for customers who turn on StarLink and specifically authorize that data to be shared when shopping for insurance. Ford says it only shares driving behavior with an insurance company when the driver gives explicit consent through an in-vehicle touchscreen prompt. Acura, Honda, Hyundai, Kia and Mitsubishi offer driver scoring features similar to OnStar’s Smart Driver, but all require the customer specifically opting in before it shares that data with insurance companies, according to today’s report.

What can drivers do?

Some owners told the outlet they are selling their GM vehicles, while others are even considering filing lawsuits against the automaker for the alleged opacity of their data collection practices as it pertains to third-party sharing, especially with insurance companies (or through data brokers that insurance companies work with).

If you own a GM vehicle, you may want to check exactly which OnStar services you are signed up for, and specifically whether you are enrolled as Smart Driver as part of your plan. A careful look at your connected services plan may be in order even if you own a non-GM vehicle, as virtually every automaker touts always-on connected car services as a selling point. If you are concerned and there is a mechanism to opt out (by disenrolling from services, for example), make sure to do so.

While it’s extremely difficult to find a vehicle that doesn’t collect at least some data on its driver’s habits, the general mindset and regulation focuses not on whether cars collect data, but what data it does collect and where that data goes. This new “gold rush” of information has prompted investigations into automakers’ collection of sensitive information from the California Privacy Protection Agency, a nonprofit consumer watchdog, as well as lawmakers on Capitol Hill. Senator Ed Markey of Massachusetts is urging the Federal Trade Commission to investigate whether there is collusion between automakers and insurance companies. If the insurance companies then use that data to raise rates, he says: “That’s, from my perspective, a potential per se violation of Section 5 of the Federal Trade Commission Act.”