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Tipsheet

Texas AG Is Suing Allstate for Building 'World’s Largest Driving Behavior Database'

AP Photo/Tony Gutierrez, File

Texas Attorney General Ken Paxton filed a lawsuit against Allstate and its subsidiary, Arity, alleging the insurance company unlawfully collected data about Texans and used the information to justify jacking up insurance rates.

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Paxton argued the unlawful data collection violated the state’s Data Privacy and Security Act, a law that “requires clear notice and informed consent regarding how a company will use Texans’ sensitive data." Texas alleges Allstate failed to provide notice or obtain consent. 

Allstate, through its subsidiary data analytics company Arity, would pay app developers to incorporate its software to track consumers’ driving data. Allstate collected trillions of miles worth of location data from over 45 million consumers nationwide and used the data to create 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. (Attorney General of Texas)

“Our investigation revealed that Allstate and Arity paid mobile apps millions of dollars to install Allstate’s tracking software,” Paxton said in a statement. “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.”

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The software was designed beginning in 2015 by Allstate's data analytics unit Arity, and integrated into apps such as Fuel Rewards, GasBuddy, Life360 and Allstate-owned Routely, the complaint said.

Texas said Allstate has also recently bought data about vehicles' whereabouts directly from manufacturers to more accurately determine, not based solely on cellphone locations, when policyholders are actually driving.

Manufacturers that allegedly sold this data to Allstate include Toyota, Lexus, Mazda, and Stellantis' Chrysler, Dodge, Fiat, Jeep, Maserati and Ram. (Reuters via Yahoo Finance)

The lawsuit is the "first enforcement action ever filed by a State Attorney General to enforce a comprehensive data privacy law," Paxton's office said.  

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