Texas Sues Allstate for Using People’s Driving Data for Insurance Rate Hikes

Texas is suing Allstate for allegedly collecting and selling people’s location data to justify car insurance price increases. 

Texas Attorney General Ken Paxton claims Allstate has been “unlawfully” collecting the data through mobile apps, such as Life360, a location-sharing software. 

Back in 2018, Allstate began a partnership with Life360 to connect users with personalized insurance offers. But the lawsuit from Paxton’s office claims the partnership has been part of Allstate’s goal to create the “world’s largest driving behavior database,” which can hike up car insurance costs for consumers. 

“If a consumer requested a car insurance quote or had to renew their coverage, insurers would access that consumer’s driving behavior in Defendants’ database. Insurers then used that consumer’s data to justify increasing their car insurance premiums, denying them coverage, or dropping them from coverage,” Paxton’s office alleges. 

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The same data could claim that a user exhibited “bad” driving behavior even though they were merely a passenger in the car, bus, or taxi. In July, The New York Times documented how such data can be used to calculate a “driver score” for a consumer, which can determine their insurance rates while exposing them to unexpected tracking. 

In Allstate’s case, Paxton’s lawsuit claims the company and its subsidiary Arity paid various mobile apps, including Fuel Rewards and GasBuddy, millions of dollars to install the company’s tracking software. “Once Defendants’ software was downloaded onto a consumer’s device, Defendants could monitor the consumer’s location and movement in real-time,” the suit says.

The collected data included the phone’s altitude, longitude, latitude, bearing, GPS time, and speed. Allegedly, Allstate has also been purchasing the same data from car manufacturers such as Toyota, Lexus, Mazda, Chrysler, Dodge, Fiat, Jeep, Maserati, and Ram.

According to Paxton, the covert data collection also violates the Texas Data Privacy and Security Act, which went into effect last July. It prohibits companies from selling users’ precise geolocation data unless consent has been obtained. 

“Allstate never provided notice or obtained Texans’ consent to collect or sell their sensitive data,” Paxton’s office added. “This is the first enforcement action ever filed by a State Attorney General to enforce a comprehensive data privacy law.”

Allstate didn’t immediately respond to a request for comment. But the company’s subsidiary Arity has indicated it has access to data from over 45 million consumers. Paxton’s lawsuit is now demanding the court force Allstate to delete the collected data and pay affected consumers in restitution. In August, his office also sued General Motors for allegedly selling customers’ private driving data to insurance companies.

About Michael Kan

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I’ve been working as a journalist for over 15 years—I got my start as a schools and cities reporter in Kansas City and joined PCMag in 2017.

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