Have you had your car insurance rates stay high even though you have an excellent driving record? No tickets nor accidents? Then check out the apps on your phone. One of those spying apps may be reporting your driving data to your insurance company. Why? How? Is it legal? Let’s discuss.

Why would the insurance company want my driving data?

Insurance companies largely determine their rates based on risk, or the likelihood that something will happen that causes them to have to pay. If you are under 25, unmarried, and male, you will likely have a higher insurance rate than an over 40, married woman. Even if you the individual are a very safe driver, there may be many in your demographic who are not so careful drivers.

So what if insurance companies could determine risk based on the individual’s behavior and not the group they belong to? Then the riskiness of an individual and the rates they pay could be better determined. This individual pricing saves careful drivers money. Many companies ask customers to voluntarily add a device to their car so the insurance company can judge their driving habits and give them discounts for safe driving.

Why would apps want to tell my driving data?

In a word, money. The data is valuable for the insurance company, and they are willing to pay money for it.

Which apps might be profiting from my driving data?

Investigative reporting shows that several apps are sending driving data to Arity, a company owned by Allstate, that in turn sends information to the insurance company. Some of the apps include Life 360, MyRadar, Fuel Rewards, and GasBuddy. These apps say they are only allowed to send data if the user opts in to data sharing. However, some users may not fully understand that when they opt in they won’t just be sharing data with the app, but also with an insurance company.

What driving data is sent to the insurance company?

Companies, like Arity, create driving scores that are sent to the insurance company. The score represents the drivers risk of an accident based on various driving behaviors like speeding, sudden breaking, aggressive driving, and phone usage while driving.

Wait, what? How do they know my driving behavior?

Your phone has a number of sensors that apps can access like the accelerometer, GPS, and gyroscope. These sensors can help apps determine where you are, how fast you are going, and how much you are handling your phone while driving.

So is this ok? Is it legal?

We may find out soon. This year, the state of Texas sued Allstate and Arity for violating their Texas Data Privacy and Security Act. Additionally, consumers from Georgia and California filed class action lawsuits alleging violations of laws like the Federal Wiretap Act and the California Computer Data Access and Fraud Act.

We’ll certainly be watching to see what comes of these lawsuits.

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