Insurer Sued by Red State for Building Massive Driving Behavior Database with Customer Data

Over 45 million Americans' driving behavior data was allegedly illegally collected, used, and sold by Allstate insurance company, according to a lawsuit filed by Texas Attorney General Ken Paxton.

On Monday morning, Paxton filed a lawsuit in the District Court for Montgomery County, Texas, against Allstate and its subsidiary data analytics company "Arity." In the suit, Paxton alleges that Allstate and Arity have been secretly collecting driving data from over 45 million Americans' mobile devices, in-car devices, and vehicles to create the "world's largest driving behavior database," consisting of "trillions of miles" worth of data.

"Allstate and Arity were found to have paid millions of dollars to install Allstate's tracking software, according to Paxton's Monday statement. It was revealed that the personal data of millions of Americans was sold to insurance companies without their knowledge or consent, which is a violation of the law. Texans deserve better and we will ensure that all these companies are held accountable."

One of the largest auto, home, and life insurance companies in the U.S., Allstate is based in Glenview, Illinois.

In 2015, Allstate and Arity integrated tracking software into third-party apps, which unknowingly downloaded onto consumers' phones when they downloaded these apps. Once Allstate's software was installed on a customer's device, it allowed the company to monitor the consumer's location and movement in real time.

The company allegedly used driving data to increase insurance rates for customers and also sold the data to third parties, including other insurance companies, for profit.

"The lawsuit stated that defendants, Allstate and Arity, did not inform consumers about their extensive data collection and did not obtain their consent. Additionally, the lawsuit claimed that defendants never informed consumers about the various ways they would analyze, use, and monetize their sensitive data."

According to Paxton, the data-gathering practices of Allstate violate the Texas Data Privacy and Security Act, the Data Broker Law, and the Texas Insurance Code's prohibition on unfair and deceptive acts and practices in the insurance business because tens of millions of Americans, including millions of Texans, were never informed about their driving data being gathered.

He seeks to permanently prevent Allstate from collecting and utilizing customers' data and to impose thousands of dollars in civil penalties per customer.

A comprehensive data privacy law has been enforced for the first time through an enforcement action filed by a state attorney general, as stated by Paxton.

Allstate did not respond to Planet Chronicle Digital's inquiry.