Allstate Class Action Lawsuit Alleges Driving Data Collected Through Mobile Apps Was Used To Raise Insurance Premiums

Insurance company paid external mobile app developers millions of dollars to install driver tracking software in their products, according to lawsuit.

A class action lawsuit has been filed against Allstate Insurance, accusing the company of embedding tracking software in several popular smartphone apps, which covertly collect driving data from millions of users without their consent, which was then used to increase insurance premiums being charged to customers.

Demetric Sims brought the complaint (PDF) in the U.S. District Court for the Northern District of Illinois earlier this month, naming The Allstate Corporation, Allstate Insurance Company, Allstate Vehicle and Property Insurance Company, Arity, LLC, Arity 875, LLC, and Arity Services, LLC as defendants.

According to allegations raised in the class action lawsuit, Allstate and its subsidiary Arity allegedly paid developers to embed their software in unrelated mobile apps, such as the SiriusXM radio app, which then allowed the insurance giant to collect user driving data, which was then used to increase insurance rates and affect coverage decisions.

The lawsuit raises similar claims to those presented in a growing number of GM OnStar class action lawsuits, which allege that GMC, Chevrolet, Buick and Cadillac vehicles contained connectivity features that also collected data without user consent, which the auto maker then sold to insurance companies.

Allstate Insurance Company was founded in 1931, and is currently one of the largest insurance companies in the world, with millions of customers across the U.S. Arity is an Allstate subsidiary that analyzes driving data, which it then provides to Allstate, as well as other companies and organizations.

In the complaint, Sims alleges that Allstate and Arity paid millions to app developers to integrate this tracking software into various apps, including those unrelated to driving, such as SiriusXM and Life360. This software tracked detailed driving behaviors and locations by accessing data points like geolocation, speed, and even when the phone was stationary.

Additionally, the lawsuit claims that Allstate marketed and sold the collected data to other corporations and entities, without disclosing that it was obtained without consent through third-party apps. This extensive data collection reportedly contributed to what is claimed to be the “world’s largest driving behavior database,” which Allstate used for underwriting and pricing insurance policies, and also sold to other insurers, according to the complaint.

Sims, an Allstate client who used the SiriusXM app, alleges that he was never informed that his driving data was transmitted from the app to Allstate without his permission or consent.

“Defendants did not provide Plaintiff and Class Members with any sort of notice of their data and privacy practices, nor did the mobile apps notify consumers about Defendants’ practices on Defendants’ behalf,” Sims claims. “Similarly, neither Defendants nor the mobile apps notified consumers of the ways in which their Driving Data would be used, nor did consumers agree to have their data used for Defendants’ own products or services”

Based on the attached complaint, Sims is alleging violations of the Federal Wiretap Act and the Computer Fraud and Abuse Act, as well as an invasion of privacy. He is seeking permanent injunctive relief, equitable remedies, and both actual and compensatory damages.

Texas Lawsuit Against Allstate

In addition to Sims’ class action complaint, Texas Attorney General, Ken Paxton, has filed a complaint (PDF) on behalf of the State of Texas in the District Court of Montgomery, Texas, raising similar allegations against the defendants.

“Our investigation revealed that Allstate and Arity paid mobile apps millions of dollars to install Allstate’s tracking software,” Paxton said in a press release. “The personal data of millions of Americans was sold to insurance companies without their knowledge or consent in violation of the law.”

The State of Texas brings forth allegations of violations of the Texas Data Privacy and Security Act, violation of the Texas Data Broker Law and unfair methods of competition or deceptive acts or practices in the business of insurance, and asks that the defendants delete all data and make full restitution to the affected consumers.

GM OnStar Data Privacy Lawsuits

Sims’ and the Texas AG’s Allstate complaints are not the only lawsuits filed in recent months alleging illegal tracking of customer driving data, which was then used to adjust insurance premiums.

Similarly, vehicle owners have filed numerous individual and class action lawsuits against General Motors (GM), accusing the automaker of secretly collecting driving data through its OnStar Smart Driver service.

The lawsuits allege that GM and OnStar gathered detailed information such as vehicle location, acceleration and hard braking events without consent, and sold this data to consumer reporting agencies like LexisNexis and Verisk Analytics. These agencies allegedly shared the information with insurance companies, leading to increased insurance premiums for some drivers.

Given common questions of fact and law raised in the complaints, a motion was filed on April 5, 2024 to centralize all GM OnStar cases brought throughout the federal court system for pretrial proceedings. On June 6, 2024 the U.S. Judicial Panel on Multidistrict Litigation granted the request, transferring all federal GM OnStar vehicle driving data tracking claims to the Northern District of Georgia under Judge Thomas W. Thrash, Jr.

While GM recently settled with the U.S. Federal Trade Commission over the sale of private driving data, this agreement does not impact the ongoing litigation. The settlement addresses only certain regulatory concerns, but does not resolve the claims of individuals seeking compensation for the company’s privacy violations and unauthorized use of their driving data.