In a world where privacy is becoming increasingly elusive, drivers are facing an invisible foe that could be costing them money. A New York Times report details how automakers are sharing information on driving habits with insurance companies which can have a harmful impact on people’s wallets.

The report highlights the story of Kenn Dahl, a driver who lives near Seattle. He, along with many others, found himself caught up in this scheme after his car insurance rates unexpectedly jumped by 21 percent in 2022 even though his driving record is pristine. Dahl was shocked to learn that the reason for this increase was his car, which betrayed him by reporting his driving data to his insurance company without his knowledge.

Dahl realized what happened when he contacted his insurance company and was told that the increase was due to his LexisNexis report, a 258-page dossier recording every trip he made over the past six months. “It felt like a betrayal,” he told the Times.

LexisNexis is a New York-based global data broker with a “Risk Solutions” division that caters to the auto insurance industry and has traditionally kept tabs on car accidents and tickets. Upon Mr. Dahl’s request, LexisNexis sent him a 258-page “consumer disclosure report,” which it must provide per the Fair Credit Reporting Act.

What it contained stunned him: more than 130 pages detailing each time he or his wife had driven the Bolt over the previous six months. It included the dates of 640 trips, their start and end times, the distance driven and an accounting of any speeding, hard braking or sharp accelerations. The only thing it didn’t have is where they had driven the car.

On a Thursday morning in June for example, the car had been driven 7.33 miles in 18 minutes; there had been two rapid accelerations and two incidents of hard braking.

According to the report, the trip details had been provided by General Motors — the manufacturer of the Chevy Bolt. LexisNexis analyzed that driving data to create a risk score “for insurers to use as one factor of many to create more personalized insurance coverage,” according to a LexisNexis spokesman, Dean Carney. Eight insurance companies had requested information about Mr. Dahl from LexisNexis over the previous month.

This practice is not new. But it has evolved with technological advances, which have enabled companies to track cars that are connected to the internet at a more granular level.

Insurance companies have “offered incentives to people who install dongles in their cars or download smartphone apps that monitor their driving, including how much they drive, how fast they take corners, how hard they hit the brakes and whether they speed,” according to the Times.

Sometimes this is happening with a driver’s awareness and consent. Car companies have established relationships with insurance companies, so that if drivers want to sign up for what’s called usage-based insurance — where rates are set based on monitoring of their driving habits — it’s easy to collect that data wirelessly from their cars.

But in other instances, something much sneakier has happened. Modern cars are internet-enabled, allowing access to services like navigation, roadside assistance and car apps that drivers can connect to their vehicles to locate them or unlock them remotely. In recent years, automakers, including G.M., Honda, Kia and Hyundai, have started offering optional features in their connected-car apps that rate people’s driving. Some drivers may not realize that, if they turn on these features, the car companies then give information about how they drive to data brokers like LexisNexis.

In 2021, LexisNexis first announced its partnership with Ford Motor Company, which agreed to participate in its Telematics Exchange, which makes vehicle data available to insurance companies, which are looking also to participate and perhaps make a few extra bucks.

The agreement gives customers with an eligible 2020 or newer Ford or Lincoln vehicle the opportunity to use their demonstrated safe driving habits to lower their insurance premiums. Customers will be able to opt in to participate in usage-based insurance (UBI) programs, which have the potential to save customers money through more personalized insurance offerings.

LexisNexis gathers and processes connected car data through its Telematics Exchange platform, generating insights into driving  behavior that insurers can use for point of quote, underwriting and policy renewal. Insurers can make use of the information whether or not they have an existing insurer-led UBI program.

Of course, the ethical concerns surrounding this practice are abundant. For starters, collecting this type of detailed driving data without the drivers’ clear knowledge and consent is problematic from a privacy perspective. If most drivers are not aware that they inadvertently entered into this data-sharing program, there are likely plenty of people like Dahl, who unexpectedly have their insurance rates raised.

Moreover, the criteria for assessing driving behavior do not seem to be standardized, which could lead to confusion and unfairness in how insurance rates are adjusted. What one insurer might consider hard braking, another might not, which means that drivers will be penalized without a clear understanding of how their performance is being assessed.

On top of that, what happens when someone has to brake hard often? Perhaps they live in an area full of bad drivers, and need to take action to prevent accidents. The system is likely too subjective to be considered fair.

It is also worth looking at how this might affect automakers if more Americans are made aware of the fact that their cars are snitching on them to insurance companies. I would wager that most of these drivers are unaware that they are being monitored in this way. Indeed, they probably don’t know until they are hit with a higher insurance bill.