There are plenty of driving apps that monitor your movements on the road, promising savings on your car insurance or even the ability to track your loved ones. But you may be giving up more information than you realized when you signed up.
Here’s what you need to know about driving app data privacy, car insurance and data sharing.
CarInsurance.com Insights
- Nearly half of the drivers enrolled in a telematics program made significant changes to improve their driving habits, according to a Triple-I study.
- In Texas vs. Arity, state Attorney General Ken Paxton accused Allstate and Arity of violating the Texas Data Privacy and Security Act and other laws.
- In 2024, a bipartisan bill was introduced in the U.S. Senate with a companion bill in the U.S. House to prevent covered vehicle manufacturers from accessing or selling specific data and establish a secure vehicle interface framework.
How telematics and driving apps work
Telematics devices are driving apps or car add-ons that monitor your vehicle’s movements and send that data to another location. Many companies use telematics, but the ones you may be most familiar with are insurance apps like State Farm Drive Safe & Save, Allstate’s Drivewise and Progressive’s Snapshot.
You download the app to your phone, using GPS, your phone’s geo-location services, and Wi-Fi or cell networks to record and transmit information about your travels. This lets you follow a family member’s drive or clock their speed, even when they are not in the car.
Insurance companies also use telematics, touting programs that promise to reduce insurance costs based on driving habits. These usage-based insurance programs, or UBI, involve either an app on your phone or a dongle connected to your car that tracks your driving and reports to the insurer.
Telematics programs collect data like:
- Driving speed
- Driving time
- Time of day
- Routes taken
- Sudden stops or harsh braking
- Cell phone use while driving
- Airbag deployment
Insurers use this information to assess and adjust your risk profile. If you have a track record of good driving habits, you should receive a discount, typically at policy renewal time.
“UBI programs typically generate the most savings for drivers who have clean driving records and drive less than 7,500 miles per year,” said Mark Friedlander, senior director of media relations at the Insurance Information Institute.
Read more: Which companies offer telematics programs?
The hidden data trail: Who has access to your driving information?
When you sign up for a driving app or other monitoring service, your data might be shared more widely than you think.
“There are a lot of different monitoring services, so the specifics of how you are tracked, who can access your data, and even how your insurance rates are impacted can vary,” said Ben Michael, an attorney at Dallas-based Michael & Associates.
Your driving data is very valuable to car insurance companies, car manufacturers, tech startups and other third parties – but they don’t always make it clear what they’re collecting, where that data goes, and your rights to opt in or out of collection.
For example, the data analytics company Arity was founded by Allstate to collect and analyze driver behavior data. Since 2016, it’s grown into an enormous dataset, with nearly two trillion miles worth of driver data. Arity partners with clients such as Life360 (a monitoring service aimed at families) and may share a wide range of personal and non-personal information it collects about you.
Unfortunately, where that information goes after it’s collected isn’t always clear. In January 2025, the attorney general of Texas, Ken Paxton, sued Allstate and Arity for “unlawfully collecting, using, and selling data about the location and movement of Texans’ cell phones through secretly embedded software in mobile apps.”
Can your driving data raise your insurance rates?
One reason insurance companies want access to your driving data is to rate their risk of insuring you more accurately.
“Some insurers could raise your premium if their telematics app tracks poor driving habits,” Friedlander said. That’s because habits like speeding, sudden braking or cornering sharply could lead to a costly accident. Insurers want to raise your premiums accordingly to protect themselves from charging too little and paying out too much.
According to the Insurance Information Institute, 45% of drivers who participated in a telematics program took the results to heart, making significant changes to improve their driving habits. But the problem is when you don’t know that your driving habits are causing rate hikes, because you didn’t opt in to that use of your data.
For example, suppose an app like Life360 collects your driving data and later sells it to your insurance company, which uses it to decide you’ve been too careless on the road and raises your premium. Is it fair if you never agreed to share your data? Or even legal?
Although it is a contract, not everyone reads the fine print of a smartphone app closely, and even if they do, they still may not have considered what they’re signing up for.
“People hardly ever read the terms and conditions of these things,” said Ryan Reiffert, a lawyer with the Law Offices of Ryan Reiffert in San Antonio. “And if they did, they’d probably be absolutely appalled. Generally, the contract says that they can use your data for whatever they want and sell it to whoever they want. And it’s for all kinds of absurd things. Your smart bed, smart coffeemaker, smart thermostat, everything,” he said.
Driving apps, too.
“To the extent you care about privacy, you should assume that enabling the ‘smart device’ feature on anything, whether it’s an insurance tracker or a coffee maker, is going to result in your device tracking everything,” he said.
Texas vs. Arity: A landmark case in telematics privacy
“Tracking everything” without consent is the main allegation that Texas Attorney General Ken Paxton levied against Allstate and Arity, the data analytics company, in January 2025. In the Texas vs. Arity lawsuit, Paxton accused the companies of violating the Texas Data Privacy and Security Act (TDPSA) and other laws.
“Our investigation revealed that Allstate and Arity paid mobile apps millions of dollars to install Allstate’s tracking software,” Paxton said in a press release. According to the lawsuit, consumers did not consent to sharing their private data and were unaware it was being collected.
The case has implications beyond the Lone Star State. Data brokers and car insurance companies, incentivized to gather data that boosts their bottom line, now must face increasing scrutiny over their privacy practices.
Intending to combat rising premiums, consumers are torn between chasing savings via usage-based insurance and privacy. And legislators, tasked with navigating new technology while balancing business and consumer interests, are left to find a workable solution that protects their constituents’ rights to control their personal data.
How to protect your driving data
If you’re concerned about protecting your data while using driving behavior tracking apps, you can do a few things.
First, make sure you read the privacy terms of the telematics app carefully before agreeing to them.
“You want to make sure to actually read the specifics of how your data is accessed and utilized, so you know what your exact service is doing,” Michael said. “Some companies have been known to sell data, so look into that as well. Generally, go into it with the assumption that other people may end up with your data, and if that’s not something you are comfortable with, you may not want to use one of these services.”
If you decide to use the app, change your permission selections to gain more control over what is collected and shared. For example, change “always allow” to “only while using” so the app doesn’t collect your data when you’re not using it. The National Cybersecurity Alliance recommends opting out of data sharing altogether when possible.
Using an app directly from the insurer may help, too, as the industry must conform to tighter regulations than other businesses.
“Now, with regard to insurance trackers specifically, there is one big limiting factor that doesn’t really exist when it comes to smart thermostats or smart coffeemakers, at least in the U.S.,” Reiffert said. “Depending upon the state, insurance companies are sometimes only allowed to use that data for certain things or in certain ways, which may come as some comfort. But I would sound one very cautionary note about that: Laws can change, and just because that data isn’t being used, doesn’t mean it doesn’t still exist somewhere.”
And remember, you can always ask for help.
“We recommend discussing your options with a licensed insurance agent to ensure the UBI program will benefit you and you will not incur any surprises from how the data being collected by your insurer will be used,” Friedlander said.
What does this mean for your car insurance rates in the future?
As more car insurance companies lean on AI and include driver data as a rating factor, the use of telematics in insurance pricing is predicted to grow, according to the Agent Support Network of America. This organization helps independent insurance agents grow their business. But that means both privacy and costs can become more challenging to manage.
“According to a 2022 consumer study conducted by the Insurance Research Council, more U.S. drivers are open to opting into UBI programs to save on their auto insurance premiums,” Friedlander said. But, he added, “More widespread acceptance of telematics programs and UBI remains elusive due to privacy concerns.”
Both consumers and legislators recognize the need for better consumer protections in the face of such massive data collection. In December 2024, a bipartisan bill called the Auto Data Privacy and Autonomy Act was introduced to the U.S. Senate, with a companion bill in the U.S. House of Representatives. It would “prevent covered vehicle manufacturers from accessing or selling certain covered vehicle data and for other purposes.” It would also establish a framework for setting standards for a secure vehicle interface.
As of late June, the bills were still in committee — Energy and Commerce (House) and Commerce, Science and Transportation (Senate).
Until new legislation catches up with the technology, you can take steps to remain informed and in control of your data. Monitor the news, check in on your app settings frequently and consider the risks of using telematics and mobile apps against the benefits they provide.
FAQs
Does Life360 share my data with insurers?
Indirectly, yes. Life360 shares data with two business partners: Placer.ai and Arity. You can choose to allow Life360 to share your personal driving data with Arity, which in turn may provide it to insurance partners who may be able to offer you lower premiums based on good driving behavior. Life360 states the insurance company must obtain your explicit consent to receive driving data from Arity.
Can I get cheap insurance without tracking?
Yes, you can get cheap car insurance without signing up for usage-based insurance. The factors affecting your premiums include your age, gender (in some states), vehicle, location, driving record and credit score (in some states).
What should I do if my data was shared without consent?
Check your app privacy settings, delete your data and contact the Federal Trade Commission. The FTC can sue companies that break privacy laws. In January 2025, the FTC proposed an order to punish carmaker GM and its subsidiary OnStar for violating privacy laws and selling driver data without consent. According to the FTC, punishment for each violation can carry a civil penalty of up to $51,744.
Resources & Methodology
Sources
- The Agent Support Network of America. “The usage-based insurance market is growing exponentially.” Accessed July 2025.
- Cambridge Mobile Telematics. “Telematics in auto insurance.” Accessed July 2025.
- Casualty Actuarial Society. “Bumps in the telematics road: privacy and transparency.” Accessed July 2025.
- Federal Trade Commission. “FTC takes action against general motors for sharing drivers’ precise location and driving behavior data without consent.” Accessed July 2025.
- Texas Attorney General. “Attorney General Ken Paxton sues Allstate and Arity for unlawfully collecting, using, and selling over 45 million americans’ driving data to insurance companies.” Accessed July 2025.
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