What You Don't Know About Your Car Insurance Could Kill You:

The modern unibody auto is a marvel of fuel efficiency and safety. But the very techniques designed for maximum protection for occupants and gas mileage have resulted in a precise structure that cannot be restored to the same degree of safety following a major collision using the standard frame-straightening and other techniques found in the collision repair industry. There are no standards regulating this well-kept secret of the insurance industry. That practice puts millions of Americans at risk in any subsequent crash.

Sunday, May 19, 2013

OnStar Kidnaps Data: Says YOUR Info Does NOT Belong To YOU

Chevy's OnStar system has told a Santa Barbara, California man that he can't have his own data.

Following a major collision that totaled his car, the car owner -- and OnStar customer -- contacted OnStar to obtain the accident data.


Instead of cooperating with its own customer, OnStar -- while admitting it had data on the accident -- essentially told Perdue to take a hike and come back with a court subpoena.

Perdue owned the vehicle, paid for it and everything in --  it including his data. But OnStar refused to give Perdue his own data even after he sent a request in writing.


The situation began  April 16, 2013 when a distracted California Highway Patrolman drove his Crown Vic cruiser at an estimated 40 miles per hour into the rear of Perdue's Chevy Sonic while it was stopped at a traffic light in Goleta.  The Sonic was totaled.

Despite a major collision between the subcompact Sonic and the massive Crown Vic, neither Perdue nor his passenger were injured. But the Sonic gave up its mechanical life: its frame was bent and the crumple zones well crumpled.

Perdue said he was grateful when the OnStar emergency operator contacted him seconds after the collision. While no airbags deployed, the Sonic has accelerometers and other instrumentation that are monitored and both sent to OnStar and stored in the car's Event Data recorder.


The data kidnapping extends to the even more detailed data stored in Event Data Recorders (EDR) -- the  black boxes similar to those required for commercial aircraft that come with most new vehicles.

General Motors began rolling out EDRs in the 1990s.

This .pdf shows shows widespread the adoption has become across most car companies.

Perdue asked for his data by phone and in writing. OnStar said no. The data is Perdue's. OnStar has illegally refused to return his property.


Chevy's OnStar system has grown notorious for reserving the right to use customer data in all manner of promiscuous ways, passing it along to others and using it in ways their customers never imagined. Their Terms of Service have been assailed by privacy activists.

OnStar was even forced to cancel a plan to sell the information to outside companies after a public outcry.


 OnStar's previous privacy violations prompted a senatorial call for FTC hearings. This example is a brazen attempt by a corporate giant to steal a customer's own data for its own use.

Interstate theft of data from millions of Americans should be investigated by the Justice Department.


The CHP admitted all responsibility. Allstate totaled out Perdue's Sonic. He has a new car.

So why is the data still significant?

First of all, it's his data that's illegally still being held hostage. Other people in his position may find things did not go as well, and need to obtain the data. Only to find that OnStar's data-nappers refuse to release what belongs to them.

Second, event though Perdue and his passenger were given a clean bill of health at a hospital following the accident, the OnStar and EDR data would record G forces and other factors that might be relevant in any subsequent medical issues that might develop.

Third, the G forces and other data captured by the Sonic's EDR sensors could be compared to crash data collected by NHSTA and private accident reconstruction companies to better determine the level of damage done to the frame and other elements of the vehicle. That data could contribute to the overall understanding of the crashworthiness of vehicles which have been repaired after major collisions.

Financial Incentives To Repair Unsafe Vehicles

Insurance companies and repair shops have a financial incentive to repair cars even those that can never be as safe as they were before a collision.

If your only damage estimate comes from the repair shop tied to your insurance company, you're in line to be screwed.


Because the repair shop has a financial incentive to push their estimate to the maximum allowable withOUT totaling the vehicle -- even if the vehicle should be totalled out.


Because, if the repair shop totals it out, then they lose the money from the repair job.

The insurance company also has a financial incentive to avoid totaling the car out -- even when it's proper for safety -- because that costs them more money.

The repair shop knows this, so they're careful not to total out too many cars because that means they could lose their favored status with the insurance company and, by doing so, lose the easy money.

This practice shafts the consumer.


Because repairs from a major accident where the car should be totaled means that a consumer can be stuck with a lemon and a safety hazard. And the financial disaster that comes when a CarFax reveals that no one will buy their car because the genuine retail value of their car is ZERO!

If you feel your vehicle should be totaled, the second repair estimator should understand that.

Diminished Value: The Hidden Insurance Company Rip-Off

The California auto insurance industry is costing consumers billions of dollars, encouraging auto sales fraud and putting potentially unsafe autos back on the road due to outmoded, dangerous laws regarding "diminished value."

Diminished value is the lower re-sale value of a car which has been repaired following an accident. Even if repaired so that a car appears new, the damage -- especially in major collisions where twisted frames and other serious damage occurs -- drastically lowers the retail market value. Often, the car is "toxic" and will find no buyers at all.

If the value of something in a free market economy is what someone is willing to pay for it, then a car that no one will buy has a value of zero. And that is what often happens to cars that have been in major accidents.

In the past, nationwide crash records were not kept and the sellers of the auto could -- either intentionally or unknowingly -- sell the car to an unsuspecting buyer who had no idea that a car had been in an accident. This lack of records encouraged silence on the part of the seller.

The advent of CarFax and other accident-tracking services is imperfect but has the potential to change that.

The fair market value of a vehicle has always been tied to its condition: age, wear, a mechanic's evaluation of the drive train, tires, visible dents, upholstery and more. CarFax and other services fall into the same category of information that allows a potential buyer to assess the appropriate fair price.

But thanks to a loophole in California state law, insurance companies will not allow CarFax or other repair records to be considered when calculating fair market value for damaged autos.

This is particularly serious in major accidents where frames and other major components have been twisted or destroyed. Insurance companies typically will not "total out" a vehicle unless the repair costs exceed 65% to 70% of the "fair market value" of the vehicle.

However, state law allows insurance companies to refuse consideration of CarFax and repair records in the valuation. Thus, a car which has never been in an accident and one which has been in a serious accident are assigned the same value.

As an example, this means that a vehicle that is worth $16,000 undamaged, but has been in major accident requiring $8,500 worth of repairs and been repaired, is still assigned a value of $16,000 even though a CarFax or other damage report lowers actual fair market value to $10,000 or less -- often no more than salvage value (parts). In this example,  the $6,000 difference between the undamaged value and the damaged but repaired value is called "diminished value."

Car owners owners are then left to eat the thousands of dollars they have lost because of the loophole since the ACTUAL fair market value of their vehicle is not the INSURED fair market value. That is deceptive on the part of the insurers.

Unethical or financially strapped owners are left to hope that no one checks with CarFax or that CarFax doesn't have a report which is very often the case. Thus, the "diminished value" loophole encourages fraudulent sales where the damage is not disclosed.

In addition, because late-model cars are made to crumple in order too protect passengers, the repair attempts to straighten crumpled zones results in micro fractures, metal fatigue and an overall inability to keep passengers safe in the event of a subsequent collision.

This is particularly important in "unibody" cars in which the frame is simply part of the overall structure. When the frame crumples in a major accident, the overall safety integrity is compromised when that vehicle is straightened. No one has any data on how many unsafe cars like this are on the road.

It's time this loophole is closed by the California Legislature.