Allstate ordered to face privacy lawsuit over alleged cellphone tracking of drivers

Allstate was ordered to face a lawsuit alleging the insurance giant tracked drivers through their cellphones without their consent and tried to cash in on the data to boost profits.

A federal judge in Chicago ruled Tuesday that drivers can move ahead with a proposed class action accusing Allstate of illegally collecting detailed cellphone data, including location, speed, braking, acceleration and phone use, Reuters reported.

The Illinois-based company is accused of using that information to raise premiums, deny coverage and sell the data to other insurers.

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Drivers may also seek to prove that Allstate’s data analytics arm, Arity, violated federal law by misreporting their driving behavior, according to Reuters.

The lawsuit alleges Arity’s tracking software was built into apps, including GasBuddy, Fuel Rewards, Life360 and Routely.

The judge allowed drivers to proceed with claims under the laws of 20 states, while throwing out three of the 38 claims in the case.

Allstate argued drivers did not claim the company actually collected their data or raised their insurance rates. 

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The insurer also said its privacy policies made clear that data could be collected.

“Consumers who choose to share driving data through Arity-powered apps can access emergency assistance, track fuel efficiency and unlock personalized insurance rates after a clear notice and explicit opt-in process,” Allstate told FOX Business in an email.

The case combines 15 separate lawsuits filed against Allstate, Reuters reported.

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Insurance companies, including Allstate, Progressive and Geico, use telematics technology to track driving behavior, saying it can reward safe drivers with lower premiums, according to Reuters.

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In January 2025, Texas Attorney General Ken Paxton filed a similar lawsuit accusing Allstate and Arity of unlawfully collecting, using and selling Texans’ cellphone location and movement data through software embedded in mobile apps, including Life360.

Attorneys for the plaintiffs could not be immediately reached by FOX Business for comment.

Reuters contributed to this report.

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