Texas files Allstate data privacy lawsuit over ‘driving behavior’ database

Allstate lawsuit overview:

• Who: Texas Attorney General Ken Paxton filed a lawsuit against Allstate Corp. and its subsidiaries.
• Why: The Allstate data privacy lawsuit claims the insurance company illegally collected and sold consumers’ driving behavior data.
• Where: The Allstate lawsuit was filed in a Texas state court.

Texas Attorney General Ken Paxton has filed a lawsuit against Allstate Corp. and its subsidiaries over claims the insurance company illegally collected and sold consumers’ driving behavior data.

The Allstate data privacy lawsuit claims the insurance company “secretly” collected and sold data from mobile devices, in-car devices and vehicles on “trillions of miles” of consumers’ driving behavior.

It claims Allstate used the data to build the “world’s largest driving behavior database,” which it then sold to third parties, including other car insurance carriers.

“Millions of Americans, including Texans, were never informed about, nor consented to, Defendants’ continuous collection and sale of their data,” the Allstate lawsuit alleges.

Paxton argues Allstate covertly collected much of its data by maintaining active connections with consumers’ mobile devices and harvesting the data directly from their phones.

Allstate developed software that it integrated into third-party apps so that when a consumer downloaded the app onto their phone, they also unwittingly downloaded the company’s software, Paxton claims.

“Once Defendants’ software was downloaded onto a consumer’s device, Defendants could monitor the consumer’s location and movement in real-time,” the lawsuit says.

Allstate sold driving behavior data to other insurers, Texas AG says

The attorney general claims Allstate paid app developers millions of dollars to integrate its software into their apps and further incentivized developers by creating “generous” bonus incentives for increasing the size of its dataset.

After collecting the data, Allstate sold access to its driving behavior database to other insurers and used the data for its own insurance underwriting, the lawsuit claims.

The state argues that Allstate violated the Texas Data Privacy and Security Act, the state’s Data Broker Law and the Texas Insurance Code’s prohibition on unfair and deceptive acts and practices in the business of insurance.

The Texas attorney general is demanding a jury trial and requesting Allstate pay civil penalties and be ordered to make full restitution to all consumers who suffered a loss as a result of its alleged actions.

Last year, an Arizona federal judge refused to dismiss an Allstate class action lawsuit alleging the insurance company underpaid policyholders for property damage claims, and challenging the insurer’s method of calculating actual cash value payment obligations for structural property losses. 

Have you been affected by the alleged Allstate data privacy violations? Let us know in the comments.

The state of Texas is represented by Texas Attorney General Ken Paxton.

The Allstate lawsuit is State of Texas v. The Allstate Corp., et al., Case No. NA, in the District Court of Montgomery County, Texas

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