The insurance company Allstate is facing accusations that it illegally tracked drivers’ cellphones without their consent, used driver data to raise premiums or deny coverage, and then sold that data to other insurers to boost Allstate’s profits.
Allstate had filed a motion to dismiss. However, in a decision earlier this month, U.S. District Judge Jeremy Daniel said that drivers in a proposed class action can try to prove that Allstate violated the law by using cell phone tracking to monitor them. Judge Daniel said that drivers may also seek to prove that Allstate’s data analytics arm, called Arity, violated federal law by misreporting their driving behavior. Arity’s tracking software was built into Allstate’s Drivewise app and many other apps, including Life360, Routely, GasBuddy, and Fuel Rewards.
Here’s What You Should Know About the Case
The case actually combines 15 separate lawsuits filed against Allstate. In the complaint, filed in U.S. District Court for the Northern District of Illinois, the plaintiffs allege that Allstate and Arity have failed to comply with state and federal laws by secretly collecting data from 45 million consumers’ mobile phones. The lawsuit says that a wide range of data was collected, including:
- Travel locations
- Trip distances
- Speed
- Acceleration
- Braking
- Tailgating
- Late-night driving
- Phone usage and attention to the road
What’s more, the filing says that third parties shared their customers’ personal information with Allstate, allowing personal data like names and phone numbers to link specific individuals to their mobile phone geolocation and movement data. However, there was no way for Allstate to reliably know whether someone was driving or just, for example, taking the bus, a taxi or sitting shotgun in a friend’s car.
It can be concerning when an app collects, shares and stores a lot of highly personal information because that information can be used in many ways — including ways nobody has even thought of yet. And if the data is mismanaged, there could be legal issues down the road, including privacy issues, electronic data retention, and use issues.
The lawsuit alleges that consumers didn’t know the extent of the data collection and sharing. Even though Allstate included privacy policies with their products, the language wasn't specific enough to help drivers know exactly what was happening.
Allstate Says That Data Collection Shouldn’t Be a Surprise — It’s Right In the Privacy Policy
Allstate disagreed. The insurance company argued that the drivers didn’t claim that the company actually collected their data or raised their car insurance rates. It also said that, if it did collect data, that shouldn’t come as a surprise to drivers — Allstate’s privacy policies made it clear that data could be collected. The company clarified that drivers who choose to opt in and share their driving data through Arity-powered apps like Life360 get a benefit. They can access emergency assistance when needed, track their fuel efficiency, and get personalized insurance rates.
What’s Telematics Technology?
Allstate’s Drivewise app uses GPS-based navigation and position technologies, and is an example of telematic technology. A telemetry tracker is a device that automatically collects and transmits data from different sources to a central system where that data can be monitored and analyzed. Telematics technology uses sensors and other tech — including GPS, radio or cell phone networks — to monitor things like location, performance or health metrics in real time.
Telematics Technology can be critical in industries like agriculture, healthcare, and weather forecasting. It’s more than just monitoring. It’s aggregating data to reveal suspicious activities and usage patterns. But it’s used in ways that affect your average everyday American, too. If you’ve used a mobile app to track your run or record your heart rate in the gym, you’ve had a brush with telematics technology.
How Unusual Is Allstate’s Alleged Data Collection?
Not very. Many insurance companies, including Allstate, Progressive, and Geico, use telematics technology to track drivers’ behavior. They all say that data tracking allows them to reward safe drivers with lower premiums.
In fact, Texas Attorney General Ken Paxton filed a similar lawsuit in January 2025. The suit also accused Allstate and Arity of unlawfully collecting drivers’ cellphone location and movement data through apps like Life360, and using and selling that data.
What’s more, this data collection isn’t just limited to your phone. Your car may also be listening to you, just like every other digital device we interact with. When researchers examined some of the latest models from 25 different car brands, ranging from General Motors to Nissan, they found that every single car brand collected a large amount of data and handled that data in a way that raised privacy and security concerns. And 84% of those car brands sold that data to other companies, just like Allstate allegedly does.
So, data collection is all around us. Which makes this case an important one for all of us to track.
Related Resources
- New Maine Law Prevents Secret Surveillance Tools at Work (FindLaw’s Law and Daily Life)
- A Consumer Guide to U.S. Data Privacy Laws (FindLaw’s Learn About the Law)
- What Is the 'Reasonable Expectation of Privacy'? (FindLaw’s Learn About the Law)
