Your Car Might Be Sharing Data With Insurers—and Costing You Money

With our cars becoming smartphones on wheels, it seems the shady tracking technology you know and loathe from apps and personal devices will be joining that transition. The latest, most egregious example? GM's OnStar service offers an onboard app called "Smart Driver" that's billed as a sort of onboard driving coach to coax you into better driving behavior and improve your inputs at the steering wheel and pedals. Turns out, this seemingly benevolent feature also is tracking users—and, per aNew York Timesreport, is shoveling their data to third parties, including insurers, which could be costing drivers extra money in the form of higher premiums.

Update, 4/29/2024: According to Jalopnik, GM has pulled the metaphorical plug on OnStar Smart Driver. According to the story, a GM spokesperson is stated saying "...we have decided to discontinue Smart Driver across all GM vehicles and unenroll all customers. This process will begin over the next few months." We have also reached out to GM to confirm the discontinuation of the Smart Driver app.

Those data-use details are at best tangentially described in the Smart Driver's user agreement, but most people don't read that stuff—thousands of words of legalese on a small in-car display or on an app? Sure!—and others might not even realize the feature is even activated, something that the New York Times suggests could have been done by the dealership or a previous owner before they owned the car, meaning they never had the opportunity to agree to the user agreement in the first place. Though the mechanics of the Smart Driver data siphoning are somewhat unique, the end result—insurers gathering your data via your car's manufacturer—isn't limited to GM.

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So, Wait, What's Smart Driver Doing?

Tracking your driving data is not new, nor is it new in the context of car insurance adjustments. Many insurance plans offer ways to reduce your premiums if you can prove good driving behavior, typically by letting the insurer track your vehicle data such as trips taken, speeds, distance driven, etc. The difference, of course, between that sort of tracking and what's emerging about GM's Smart Driver is consent. Participants in direct insurer tracking-for-savings programs typically knowingly enter such an agreement seeking savings on their bills; in Smart Driver's case, that consent—and the path driver data takes to reach insurers—isn't nearly as clear.

OnStar—GM's in-vehicle communications and navigation subsidiary—describes its Smart Driver app like this: "Use driving insights to become a smarter, safer driver." Sounds good, right, like there is some sort of benefit to using this app? Sure, but your first thought when hearing about it wouldn't necessarily be that GM is tracking your personal driving behavior, then selling that data to a third party broker, which then provides it to insurers—who can then make more detailed determinations about your driving than they could otherwise, and adjust the car insurance rates and quotes they give you. None of that is even hinted at on the Smart Driver website. Instead, there are cheerful mentions of how the app game-ifies your driving, offering you chances at earning "badges" for slow braking, gentle acceleration, and other metrics.

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But If You Read the Fine Print...

Okay, so maybe the the user agreement covers that ground? In the copy of the agreement shared by The New York Times , the "Data Usage" could be described as "rather murky" in that it doesn't explain that OnStar will submit the data gathered by its free Smart Driver app to paying third parties. But it does—as confirmed by the New York Times with GM—to a company called LexisNexis, as well as Verisk.

Those data brokers then go on to sell your data to insurance companies keen on gathering the most complete picture of the customers they're underwriting. Now, as mentioned already, some customers happily give away such data—when they specifically consent to it when signing up for programs to lower their insurance premiums. But also in such cases, there is a clear understanding that driving behavior will have a financial impact—and so such customers are likely to drive slower, more carefully, and so on.

What if you didn't know Smart Driver was activated? Then that incentive loop wouldn't exist—and you'd make no special accommodations to drive "better" or "safer," the purported aims of the Smart Driver feature. Per the NYT piece, the feature can allegedly be turned on by a dealer or previous owner before a new owner takes possession of the car. Owners who purchased GM vehicles and saw this app could reasonably assume it's just part of the software that comes baked in, standard, like SirusXM radio, for example. If you're wondering why dealers would be activating an obscure driving coach feature onboard new vehicles, the NYT reports salespeople at GM dealerships can receive "bonuses for successful enrollment of customers in OnStar Services, including Smart Driver."

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At least, that's according to a 2023 GM "Standards For Excellence" consultant program manual. It's the book GM dealership salespeople train with and get information on things like those bonuses mentioned earlier. These bonuses depended on how many VINs had applicable features activated and what GM brands the franchise dealer sells. For example, a salesperson able to sell four or more Buicks would get up to $200 for each VIN they sold an OnStar service to, or $50 per car. Chevrolet pays $50 per VIN as a "Flat Sales Consultant" or requires more than three VINs with OnStar sold.

There was no mention of Cadillac, which is what one driver featured in the NYT story drove (and saw rising insurance premiums until he sold his Cadillac). It isn't clear whether dealers cashing in on this internal incentive walk customers through these consents at the point of sale, though the Cadillac owner says he found nothing about the matter in his paperwork.

Beyond Smart Driver's opaque consent, the dealer incentives for activating it (even if with the customer, this surely is a fast-paced "click-agree-and-move-on" scenario), and the potential for injurious financial effects on unknowing customers, there's the simple fuzziness of how the data translates to real-world driving. How is a driver to know how their braking, acceleration, and steering inputs will be interpreted by an insurer studying their data? Does actionable, premium-affecting data line up with Smart Driver's "badge" system—i.e., will good performance on the Smart Driver app ensure you look good to insurers? It isn't clear, though consumers can download their "profiles" from brokers such as LexisNexis and Verisk to see.

GM's Response

In response to our questions about the data sharing, murky consent, and more, a GM spokesperson stated, "GM's OnStar Smart Driver service is optional to customers, who give their consent three times before limited data is shared with an insurance carrier through a third party. Customer benefits include learning more about their safe driving behaviors or vehicle performance that, with their consent, may be used to obtain insurance quotes. Customers can also unenroll from Smart Driver at any time." That spokesperson also went on to point out that the goal of these programs is to "reduce the total cost of insurance" and "millions of GM customers have saved on their car insurance because of such services."

Its spokesperson later elaborated on that trio of consents: "The driving behavior insights can only be shared when a customer explicitly consents through an insurance carrier to have the data shared. This is after two other consents as well, one at the time of accepting privacy terms when enrolling in OnStar, and the other at the time of consenting to and enrolling in Smart Driver."

Here's the rub, though—"consenting through an insurance carrier" is kind of a punt by GM, because as the NYT points out, it's buried in the blanket agreements you enter with insurers when either paying for their services or requesting quotes from them, in which they go rooting around for your information, including credit reports in states where that's allowed. As for the other two consents customers give GM regarding Smart Driver's data handoff to insurers—again, by way of data brokers such as LexisNexis and Verisk—no specific mention is made in either of them about such data use.

In the generic OnStar Privacy Statement, GM mentions your data can be shared with "third party service providers working on your behalf." The words "insurance" or "insurers" or any mention of potential insurance rate impacts aren't found anywhere.

The Smart Driver consent page is far shorter, and mentions only: "We'll [GM] use information we collect about where and how you operate your vehicle, such as your vehicle's location, routes driven, driving schedule, fuel or charging levels, fuel economy, battery status, overall vehicle health, and driving behavior, such as hard braking, hard acceleration, tailgating, vehicle speed, late night driving, driver and passenger seatbelt status, and driver attention. Smart Driver 'hard braking' and 'hard acceleration' events are identified when measured vehicle speed changes rapidly, regardless of the cause of the rapid speed change.

"We may also use alerts from your vehicle, such as forward collision and traction control. "

Though GM says it'll "use" this information, it doesn't specify how, or even that it could be shared with third parties. Again, GM's spokesperson says that's covered by those overlapping consents given to OnStar and, if you pay attention when buying or shopping for insurance, whatever agreement an insurer forces you to click through (and that most people won't read). It took GM several days to get back to us with this constellation of supposedly overlapping consents, including the exact language of the Smart Driver consent agreement; do you really think customers could sort this mess out?

In response to the New York Times piece's assertion that some customers say they never activated Smart Driver in the first place, yet were tracked anyway, possibly because dealers signed them up without their knowledge when they purchased their vehicles, GM stated there is no way to activate OnStar or its Smart Driver app without consent from the owner saying, "In all cases, the customer must consent to enrolling in Smart Driver."

For the Smart Driver app itself, it must be associated with the customer's OnStar account and the VIN they want to use. "The customer must personally review and accept or decline the Smart Driver terms and this is listed in the terms shown at the dealer as well," said the GM Spokesperson. If the vehicle was bought used, there is a way to unenroll your vehicle in case the previous owner didn't. Normally, GM gets a notification from the prior owner that the vehicle was sold or based on state vehicle registration data and OnStar is supposed to be terminated after that point, with GM saying, "the new owner may call in and request to activate services."

I Don't Own a GM Vehicle, So What?

Suffice to say that, unless you own an OnStar Smart Driver-equipped General Motors vehicle and are a perfect driver or don't mind paying incrementally more for car insurance without fully realizing why, you might want to turn off and unenroll yourself from the Smart Driver app.

Even if you don't own a GM vehicle, the maker of your car could be sharing or selling data to a broker like LexisNexis— The New York Times identifies several automakers that do so, albeit with somewhat better, clearer consent options and to various brokers, including Honda, Hyundai, Subaru, Ford, and others. We suggest to check whether your user agreements—and, annoying as they can be, always read them, though they might not be completely helpful.