Your Car Will Tell on You

Posted Friday, Jun. 13, 2014  comments  Print Reprints
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It was the late 1990s when stories started circulating about Black Boxes, which recorded certain basic events critical to accident reconstruction, being put into automobiles. Like the NSA, automakers misled the public on how many such devices new cars were carrying, at first claiming it was just small test of those devices; ultimately we found out that their usage was already widespread. But the implications were clear: Should you be involved in a major accident, your vehicle’s Black Box might tell a completely different story than the one being peddled in a lawsuit.

Those Black Boxes saved Toyota’s skin during the unintended acceleration fiasco a few years ago. And in the current case of GM’s ignition problems, most reports blame a defect in those cars involved in accidents: The ignition was found in the Off position. Conversely, the devices also revealed high speed, right up until the moment of impact, indicating that the engine was still running.

Why would automakers install such devices in their vehicles? Self defense, for one reason. It is widely known that, in many lawsuits against automakers, the victims often make up outrageous stories to validate their claims. But now, for the first time in the auto industry’s history, car companies could produce proof that many accidents were the drivers’ fault, not any failure of their product.

That said, from day one car buyers should have been informed if their vehicle had such a device installed — and that their own automobile could be used against them in a court of law. If nothing else, knowing that your car was spying on you might have well improved the driving habits of more than a few individuals.

Then in the summer of 2010, while reviewing that year’s new Volkswagen Jetta, I noticed that its navigation system also displayed the posted speed limits of whatever road I was traveling. Moreover, the navigation system had the speed limits correct — in all but a 10-mile stretch of Highway 95 between Waco and Bastrop. Impressive then, to say the least, and today many automakers’ navigation systems incorporate this feature.

On the other hand, like the Volkswagen Jetta’s, vehicle navigation systems’ posted speed limits aren’t always accurate. When I reviewed the extremely impressive Kia K900 luxury sedan recently, its system showed the speed limit on Interstate 30 west of Dallas at just 30 mph until one reached Loop 12. No big deal, you say? Today that would be true — but that computer error’s could cost you dearly in the future.

Senseless Surcharges

As long as modern commerce has existed, so has an insurance industry to mitigate the high cost of unexpected corporate and individual losses. Employing thousands of actuaries to calculate total risk, the insurers can calculate the premiums to protect the masses from the worst losses. Modern economies exist solely because insurance has removed the financial risk of everything, from international trade to one’s life ending prematurely to damage to or liability from the automobiles we drive.

The concept is simple: In 2014 the insurance industry knows approximately how many automobile accidents will take place in America, the average claim amount, number of accidents by age group, and so on. Actuaries then use those probabilities to calculate how much to charge for policies to cover specified losses — and still leave the insurance company with an after-claim profit.

In the case of automobile insurance, you’ll pay more if you get a number of tickets for moving violations, or a DUI, or if you’re to blame for an accident, within three years. Actuaries have determined that individuals who do those things are likelier to have more accidents — and therefore file more claims — than persons with unblemished driving records.

In recent years insurance companies have been targeting those with less than stellar credit scores for higher premiums; one will assume that’s based on the statistic that such individuals are more likely either to have accidents or to file false claims for reimbursement. After the New York Public Interest Research Group did a study recently, it was shocked to find that many of the state’s insurance carriers levy serious surcharges based on whether one has a high school degree or by occupation. But not for the reason one might think.

According to the Wall Street Journal’s MarketWatch.com, Progressive Insurance charged a high-school-educated retail clerk $916 more for the same auto insurance than it did a college-educated bank teller, even though both had exactly the same driving record. GEICO charged 41 percent higher premiums in the same scenario. New York investigators concluded that insurance companies were now charging higher premiums not based on any known actuarial factors, but were using computer models to find individuals who are less likely to shop around for better rates. (This is not part of the NY study, but insurance companies’ cookies can track you online right now to see if you’re looking for a better deal.)

I Know What You Did Last Summer

And now comes England, whose major insurance companies are launching high-tech products to monitor owners’ driving. Similar to Progressive’s SnapShot™, the new telematics systems in automobiles will work with the tracking Black Boxes that will be mandatory starting in 2015. British insurance companies will thus be able to track one’s driving habits 24/7, seeing if one is speeding on a regular basis and at what hours one is driving to determine just how much they can charge one for insurance.

What if you refuse to be spied on? As reported by The Telegraph, opting out of these systems in the future will suggest to insurance companies that your driving skills are so bad, you’re afraid to be tracked — and your automobile insurance premiums will automatically skyrocket. Guilty until proven innocent.

And that brings us back to that Kia K900 and how its navigation system falsely showed Interstate 30, from downtown Dallas to Loop 12, as having a posted speed limit of 30 mph. You see, it’s that same GPS unit that insurance companies will use to automatically collect data on your driving habits. In the I-30 case, this means that someday your insurance company will believe you are driving at least 30-40 miles an hour faster than the speed limit and hike your insurance premiums accordingly. You are not violating the law, your car’s computer is wrong; but you’ll pay for its mistake automatically.

Where’s the Outrage?

Of course it gets worse. Hundreds of thousands of drivers in North Texas have zero accidents over the past three years and no tickets issued for moving violations. As a result, today they can potentially get the lowest possible rates on their insurance policies. But, like others, they are constantly doing 70 – 75 in posted 60 mph zones on our freeways. In the future, their insurance company will be able to treat them as if they were getting speeding tickets every day, because their car’s navigation computer knows the posted speed limit and knows they are exceeding it.

Then again, law enforcement may realize they could use that same system in your car to issue computerized tickets for speeding, and simply mail the violation to you for payment. By the way, this basic system already exists in many automobiles: How do you think GM’s OnStar™ works?

The problem is that in spite of what the media reports, there’s been no outcry, no outrage about vanishing personal privacy rights. Not about the NSA spying, not about Google reading your e-mails to tailor ads for you; no one’s protesting any of the hundreds of ways our modern technology intrudes upon our lives.

When enough good drivers are surcharged for their automobile insurance in the future because insurance companies will use data your car sends them to calculate your risk — not based on your real world risk of having an accident, — maybe then the public will finally understand. Technology is great and has vastly improved our world … until it started being used against us.

© Ed Wallace 2014

Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism. He hosts Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. E-mail: wheels570@sbcglobal.net; read all of Ed’s work at www.insideautomotive.com

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