Drivers said Allstate tracked their movements to raise rates
Judge lets Federal Wiretap Act claim proceed
Insurers use telematics to monitor driving habits
Allstate says it provides clear notice to drivers
Adds Allstate statement in paragraph 8
By Jonathan Stempel
March 4 (Reuters) - Allstate ALL.N must face a privacy lawsuit accusing the home and auto insurer of illegally tracking drivers through their cellphones without consent, using their data to raise premiums or deny coverage, and selling the data to other insurers.
In a decision on Tuesday, U.S. District Judge Jeremy Daniel in Chicago said drivers in the proposed class action can try to prove that Allstate violated the Federal Wiretap Act by monitoring their travel locations, trip distances, speed, acceleration, braking, phone usage and attention to the road, and tried to monetize that data to boost profit.
Drivers can also try to show that Allstate's data analytics unit Arity violated the federal Fair Credit Reporting Act by inaccurately reporting their driving behavior, including when they rode as passengers.
According to the complaint, Arity's tracking software was integrated into apps such as Fuel Rewards, GasBuddy, Life360 and Allstate-owned Routely.
The judge also let drivers pursue claims under the laws of 20 U.S. states. He dismissed three of the drivers' 38 claims.
Insurers such as Allstate, Progressive PGR.N and Berkshire Hathaway's BRKa.N Geico use so-called telematics in monitoring drivers' habits. They say the technology rewards good driving through lower premiums.
Allstate argued that drivers never alleged it actually captured their data, or that their insurance rates went up. It also said its privacy policies disclosed the possibility of data collection.
Allstate said in a statement on Wednesday: "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."
Lawyers for the plaintiffs did not immediately respond to requests for comment.
The litigation combined 15 private lawsuits against the Northbrook, Illinois-based insurer. Texas filed a similar lawsuit against Allstate in January 2025.
(Reporting by Jonathan Stempel in New York; Editing by Mark Porter)
((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.thomsonreuters.com@reuters.net/))