The United States is one of the busiest countries in the world in terms of road traffic, with nearly 230 million drivers and about as many vehicles in operation, per Statista. Given these figures, it does not come as a surprise that approximately 12.15 million vehicles were involved in road accidents in 2019.
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Most drivers are likely to be involved in a road accident at some point, so having car insurance provides financial protection and peace of mind. It is also a legal requirement in nearly every state, though the specific requirements and coverage options can vary. The market size of the automobile insurance industry in the U.S., meanwhile, was estimated to be in the neighborhood of $362.1 billion in 2023.
These data points don’t just illustrate the sheer scale of road traffic in the U.S., but also show how vital and powerful the car insurance industry is. That power is also reflected in the amount of data auto insurance companies have on drivers. But how do they obtain and use that data? Here’s what you need to know.
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How car insurance companies obtain your data
So, how do car insurance companies obtain driver data in the first place? You purchase a car with internet capabilities and download the manufacturer’s app, whether to access certain features or use navigation and similar services. The manufacturer then collects a wide range of data on your driving habits, and shares it with a data broker. The data broker sells that data to an insurance company, which uses it to calculate a risk score and determine your insurance rates. In a nutshell, that’s how auto insurance companies get their hands on your driving data, often without you realizing the full extent of what’s being collected or how it’s being used.
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The New York Times published a report on this practice in March 2024. The report detailed complaints from drivers, who were puzzled by quotes from insurance companies — until they realized that the insurers knew how many trips they took and where, when they were speeding, when they were hard braking, and so on. This suggests that insurance companies are not just accessing your driving record to determine rates, but also leveraging a vast ecosystem of data sharing between automakers, data brokers, and analytics firms to build a detailed profile of your driving behavior.
What kind of data do automakers collect?
The Mozilla Foundation, which advocates for internet privacy and open-source software (and is well-known for its own Firefox browser), has raised concerns about the amount of data being collected by automakers. In 2023, the non-profit analyzed the privacy practices of 25 car manufacturers, concluding that cars are the worst product category it has ever reviewed.
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Every car brand that Mozilla reviewed collects more personal data than necessary, and uses that data for purposes unrelated to operating the vehicle itself. Automakers collect personal information not only from your interaction with the vehicle, but also from connected services, apps, and even third-party sources (such as Google Maps). Aside from driving data, this can include information related to your health, genetics, the music that you listen to in your car, and even your sex life.
Of the 25 brands the Mozilla Foundation reviewed, 19 can sell the data that they collect, while 14 retain the right to share your information with the government or law enforcement. What’s worse, 23 of those brands give drivers little to no control over their data. The worst offender appears to be Tesla, but no matter what car you drive, some data is being collected from you and possibly shared with car insurance providers, according to the Mozilla Foundation.
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What you can do to protect your privacy
The first thing you should do to protect your privacy is limit your car app’s permissions on your phone. If you can avoid using the app, even better. Again, though, virtually all major car brands collect data through their apps and connected services and then share or sell it. Limiting permissions or not using the ap at all will help, but it likely won’t make a substantial difference in terms of the data your insurance company has on your driving habits.
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In some states, you might be able to use “right to know” laws to your advantage — these legal provisions give individuals the right to access information. Apart from that, privacy laws in several states also allow you to request that the car company not share your data, or even delete it entirely. You can file these requests with data brokers as well. Generally, you should receive a response from the car manufacturer or data broker within 90 days.
It’s also worth noting that some car insurance companies may offer better conditions or lower rates than your current insurer, so it’s a good idea to do your research and switch if you find a better deal.
