The state of Texas sued Allstate on Monday, accusing the insurer of illegally tracking drivers on their phones through a subsidiary called Arity, which claimed to have the “world's largest database of driving records.”
“Allstate and Arity paid mobile apps millions of dollars to install Allstate's tracking software,” Ken Paxton, the state's attorney general, said in a statement. “The personal information of millions of Americans has been sold to insurance companies without their knowledge or consent, in violation of the law. Texans deserve better and we will hold all of these companies accountable.”
Allstate and Arity did not respond to requests for comment.
The New York Times reported last year that information about people's driving habits was collected through smartphone apps, such as Life360 and GasBuddy, and sold to Arity, an analytics company founded by Allstate. Arity was able to analyze data from people's smartphones to determine how often they speeded, braked suddenly, or were distracted by their phones while driving. It used that analysis to give them risk scores.
“Insurers then used that consumer's information to justify increasing their auto insurance premiums, denying coverage, or eliminating coverage,” according to the attorney general's lawsuit, which accuses the companies of violating state privacy laws state to violate.
According to the lawsuit, filed in Montgomery County District Court, Arity possesses the location, movement and driving data of more than 45 million Americans who “were never informed of nor consented to” the continued collection and sale of their data.
Texas also sued General Motors last year for collecting consumer driving data, following a report by The Times that GM and other automakers sold information about people's driving habits to the insurance industry.
