Texas Sues Allstate for Secretly Tracking Data Used to Raise Insurance Rates; Selling it to Other Companies

Texas Attorney General Ken Paxton has filed a lawsuit against Allstate and its subsidiary, Arity, accusing the companies of unlawfully collecting, using, and selling Texans’ location and movement data without consent. The data was reportedly gathered through secretly embedded software in mobile apps, including Life360, and used to justify increasing insurance premiums for consumers.

According to the lawsuit, Allstate, through Arity, paid app developers to integrate tracking software that monitored driving behavior. The company collected trillions of miles of location data from over 45 million consumers nationwide, creating what it called the “world’s largest driving behavior database.”

When a consumer requested a quote or renewed their coverage, Allstate and other insurers would use that consumer’s data to justify increasing their car insurance premium.

These actions violated the Texas Data Privacy and Security Act (“TDPSA”), which created heightened protections for Texans’ sensitive data, including but not limited to precise geolocation information. The law requires clear notice and informed consent regarding how a company will use Texans’ sensitive data. Allstate never provided notice or obtained Texans’ consent to collect or sell their sensitive data. This is the first enforcement action ever filed by a State Attorney General to enforce a comprehensive data privacy law.

“Our investigation revealed that Allstate and Arity paid mobile apps millions of dollars to install Allstate’s tracking software,” stated Attorney General Paxton. “The personal data of millions of Americans was sold to insurance companies without their knowledge or consent in violation of the law. Texans deserve better, and we will hold all these companies accountable.”

The lawsuit against Allstate follows similar actions by Attorney General Paxton, including a lawsuit against General Motors and ongoing investigations into other car manufacturers for secretly collecting and selling driving data.