Texas sues Allstate over collection of driver data

(Reuters) – Allstate is being sued by the state of Texas, which accused the insurer on Monday of illegally tracking drivers’ cellphones without consent and using that data to justify charging more for auto insurance.

Texas Attorney General Ken Paxton said Allstate created the “world’s largest database of driving behavior” containing data on more than 45 million Americans by paying mobile app developers millions of dollars to covertly include its driver tracking software.

According to the complaint filed in Texas state court near Houston, Allstate made a profit by using the data to raise premiums or deny coverage and by selling the data to other insurers.

The payments were made through Allstate’s data analytics unit Arity, the complaint said.

The lawsuit accuses Allstate of violating Texas data privacy laws, unfair and deceptive practices by data brokers, and seeks damages, including civil penalties of up to $10,000 for each violation.

Allstate did not immediately respond to a request for comment.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)