Texas Accuses Allstate of Illegally Using Driver Data to Raise Insurance Rates

The State of Texas has filed a lawsuit against Allstate, alleging the insurance giant and its subsidiary, Arity, secretly collected sensitive driver data without consent through embedded software in mobile apps. Texas Attorney General Ken Paxton claims Allstate used trillions of miles of location and driving behavior data from over 45 million customers across the country to create a massive database, which was then used to adjust insurance rates, deny or drop coverage, and even sold to third parties, including other insurers.

The lawsuit argues that Allstate violated Texas’ Data Privacy and Security Act by failing to notify or obtain Texans’ consent before gathering or selling their data. According to the complaint, Allstate partnered with popular apps like Life360 and GasBuddy to embed tracking software and began purchasing vehicle operation data directly from car manufacturers such as Toyota, Jeep, and Chrysler. The gathered data allegedly included details like location, speed, altitude, and phone movements, raising significant privacy concerns.

Allstate has denied any wrongdoing, stating that its practices are transparent and comply with all laws. However, privacy experts believe the lawsuit could set an important precedent, marking one of the first cases under a comprehensive state privacy law. This lawsuit follows a similar one filed last year by Texas against General Motors, signaling increased scrutiny of data collection practices in the insurance and automotive industries.