Allstate to Face Class-Action Lawsuit for Customer Tracking

A class-action lawsuit against Allstate has been given the go-ahead by a US federal judge, granting drivers the opportunity to challenge the insurer’s tracking practices that allegedly infringe on their privacy rights. The lawsuit accuses Allstate of monitoring consumers’ driving behaviors via mobile phones, using the data obtained to adjust coverage and increase premiums, as well as sharing this information with other insurance companies.

US District Judge Jeremy Daniel from Chicago approved the lawsuit, citing violations of the Federal Wiretap Act by Allstate for surveillance activities that include monitoring travel locations, distances, speed, acceleration, braking habits, phone usage, and attention to the road. In addition, the lawsuit claims that Allstate’s analytics subsidiary, Arity, violated the Fair Credit Reporting Act by providing inaccurate driving behavior reports.

The judge ruled that drivers can proceed with claims under the laws of 20 states, although dismissing three out of the 38 initially raised claims. Allegations include Arity tracking individuals as drivers even when they were passengers, penalizing users for unconventional driving scenarios like mobility scooters in supermarkets or triggered automatic braking systems in their vehicles.

Allstate integrates driver-tracking software in various apps that offer reduced insurance premiums for safe driving practices. These apps also serve other functions like helping families locate each other or find affordable petrol prices. The data collected by these apps contributes to building a driver profile that Allstate then sells to other insurance companies.

The class-action lawsuit combines 15 individual cases against Allstate, amplifying the legal battle against their alleged intrusive tracking practices. The Attorney General of Texas separately filed a related lawsuit in January 2025. Despite the legal challenges, Allstate contends that their privacy policies have always been transparent about the potential collection of user data.

Overall, the approval of this class-action lawsuit marks a significant development in holding insurance companies accountable for their data collection practices and serves as a reminder of the importance of safeguarding consumer privacy in the era of increasing digital surveillance.