Drivers Face Spike in Insurance Rates due to Shared Driving Behaviors

Information regarding consumer data privacy and the exploitation of individuals’ data is coming to light in a concerning way. Car manufacturers have been gathering data on the driving habits of consumers and sharing it with third parties or insurance companies, resulting in hikes in car insurance premiums. This practice is not only invasive to drivers but also poses a great risk to their data security.

The law firm of CaseyGerry is investigating reports of increases in auto insurance premiums due to shared data on their driving habits. The majority of U.S. car manufacturers engage in this practice, but with market shares of 7.6% for Honda (1.16 million Hondas sold in 2023) and 5.29% for Kia (782,451 units sold in 2023), this violation of data privacy has a direct impact on millions of consumers.

Honda owners who use HondaLink, a driver-feedback app, and Kia drivers who use Kia Connect Services are at high risk of having their information shared with insurance companies.

According to a New York Times article titled, Automakers are Sharing Consumers’ Driving Habits with Insurance Companies, data broker company LexisNexis collects and shares drivers’ habits with third-party companies including insurance companies to analyze the risk score of each driver.

Consumer Consent?

With the lax data privacy laws in the country, many drivers do not understand which of their data is being collected and how it is being used. When questioned, the majority of car manufacturers focused on the benefits of their data collection practices and avoided addressing the risks, such as breaches and violations of consumers’ privacy. In addition, when questioned about how the data is used, including inquiries into whether the data is used for commercial purposes, they refused to answer.

PIRG.org wrote on the issue, touching on the consequences of these practices, including insurance companies raising drives’ premium rates up to 21%. In addition, the extent of data collection and sharing exposes the consumer to the dangers of breaches and identity theft.

In addition, it is almost impossible to fully opt out of data collection, leaving consumers without control over their personal information and habits.

HondaLink App

Honda updated its Privacy Policy on April 30, 2024, to include language notifying consumers that opting in to the HondaLink and AcuraLink Driver Feedback Program gives them, the company, permission to disclose information to service providers and insurance companies. HondaLink gives drivers access to several features, such as service reminders, remote lock and unlock features, location details, and roadside assistance.

However, drivers who want to limit the collection of their data may have to opt out of the HondaLink app entirely.

Kia Connect Services

Kia’s Privacy Policy, updated in November 2023, addresses their policy towards information sharing with insurance companies.

“Usage-Based Insurance. If you have an active Kia Connect subscription that supports the Driving Score feature, you may be presented with an option on the Kia Connect Services to opt in and directly disclose, or have us share, certain Personal Information and Vehicle Information to third-party service providers, including data providers, who may, in turn, share this information with insurance companies participating in the usage-based insurance (“UBIâ€) program. Detailed information about the disclosure of such information pursuant to this program can be found in the UBI Terms of Service.”

However, drivers may not be aware of what they consented to with this service.

A letter from Senator Edward J. Markey of Massachusetts to the Chair of the Federal Trade Commission, the honorable Lina M. Khan, sent in February 2024 addressed the rising concerns about the data collection and sharing practices of automakers.

Markey urged the FTC to launch investigations into the data privacy practices of automakers, as they faced little if any regulations or oversight in the collection and use of consumer data. In addition, Markey made it clear that the efforts to gain consent for data collection and distribution were inadequate. “Although the automakers may disclose their data practices in the fine print of their user manuals or privacy policies, few drivers, much less passengers or non-motorists, understand the scope of these practices.”

He included research findings from a study done by the Mozilla Foundation on car manufacturers’ data collection practices and their conclusion that cars are “the official worst category of products for privacy that we have ever reviewed.”

In August 2023, car manufacturers came under the scrutiny of the California Privacy Protection Agency (CPPA) due to concerns about data violations against California drivers.

CaseyGerry is aware of the high incidence of cyber security concerns consumers face each day. Our attorneys have represented individuals who have been victims of data breaches due to companies’ disregard for identity protection.

If you drive a Kia and use the Kia Connect, or drive a Honda and use the HondaLink App and have experienced an increase in your auto insurance rates due to driver-habit sharing practices by your car manufacturer, please contact our attorneys to explore your legal rights at 619-648-1958.