Texas Attorney General Files Lawsuit Against Allstate for Illegally Gathering Driver Data
Texas Attorney General Ken Paxton has filed a lawsuit against insurance giant Allstate for allegedly using third-party apps to track drivers without their knowledge. This move comes after a previous lawsuit against General Motors for similarly collecting and selling driver data to insurance providers. The Attorney General’s office claims that Allstate paid mobile apps to install tracking software without drivers’ consent, leading to the sale of sensitive data to insurance companies.
How Allstate Collected Data
According to the lawsuit filed by Texas on Monday, Allstate and its subsidiary paid millions to install tracking software in third-party apps like Life360 and GasBuddy. This data, collected from millions of Americans, was then sold to insurance companies without drivers’ knowledge or consent. It is believed that this practice impacted not only Allstate customers but also drivers insured by other companies who used the same apps.
Use of Data by Allstate
Allstate allegedly profited from this data by selling it to other companies and using it to inform their underwriting practices. By monitoring drivers’ behavior, such as phone usage, speeding, and hard braking, Allstate created a driving score that could potentially increase auto insurance premiums. This practice raises concerns about privacy, accuracy, and transparency in determining insurance rates based on individual driving habits.
Legal Implications and Allstate’s Response
The lawsuit is based on Texas’ Data Privacy and Security Act, which requires companies to obtain explicit consent before collecting or selling sensitive data. Allstate and its subsidiary, Arity, have defended their actions, claiming that customers consented to data collection in a transparent manner. However, the Attorney General’s office argues that drivers were not adequately informed or given the option to opt out of sharing their information.
In conclusion, the lawsuit against Allstate highlights the growing concerns about data privacy and the ethical use of technology in the insurance industry. As the case unfolds, it will be crucial to examine the legal implications of collecting sensitive data without explicit consent and the impact on consumers’ rights to privacy and fair insurance practices.