Big Smartphone Is Watching: How Auto Insurance Companies May Be Monitoring You with Smartphone Apps

May 28, 2025

At Hensley Legal Group, we are committed to educating you about the tricks that auto insurance companies love to deploy to maximize their revenues and minimize how much they have to pay out, and among their favorites tricks is monitoring your driving data. When we last examined this issue, we discussed how insurance carriers frequently try to entice their policyholders to put tracking devices in their vehicles with the lure of “big discounts” for safe driving practices. Unfortunately, these discounts have often failed to materialize and rates have sometimes even increased, leading many to swear off these devices in the future.

But if you think that nobody is monitoring what you do on the road, think again, since a recent report suggests that car insurers may already be accessing your driving data through popular smartphone apps, and you might have actually given them the green light without realizing it.

Which “Customers” Are Smartphone Apps Really Serving?

According to an article in The New York Times, an Allstate-owned company named Arity is using data from a trio of subscription-based smartphone apps to create “driving scores” derived from “risky” behavior behind the wheel, such as sudden breaking, traveling too fast, and distraction.

The three apps are:

• Gas Buddy, which locates gas stations with the cheapest fuel;
• Life360, which assists parents in finding their children; and
• MyRadar, which follow storms and poor weather developments.

On top of their primary functions, these apps all include driving analysis features that draw upon sensor and motion data captured by the smartphones in which they are installed. This data is then transmitted to and placed under a virtual microscope by Arity, which boasts about having collected “more than a trillion miles of driving data” that “helps inform how transportation, insurance, and other businesses can evolve to better serve their customers.”

And though the features may be “opt-in” or otherwise demand user consent before data can be exploited, users may not always be aware of what they are giving up by agreeing to Arity’s conditions – or which “customers” these smartphone apps are really serving.

Consenting to Share “Certain Information”

Each driving analysis feature emphasizes the benefits to smartphone users but barely mentions the benefits to others who may be interested in the users’ data, particularly auto insurance giants like Allstate.

For example, Gas Buddy’s “Drives” promises to advise users on the fuel efficiency of their trips. In order to take advantage of the feature, however, users must click on a large red “Join Drives” button, though by doing so they are simultaneously consenting to hand “certain information” over to Arity, as explained in text written in a “small gray font” beneath that button.

Understandably, a user could press this button and thus accept Arity’s terms without noticing this text or reading the hyperlinked “Privacy Statement” that has to be viewed on a separate page altogether. The fine print also does not explicitly state what Arity is or what it does – or that a significant portion of its income is generated by selling this data to other insurance firms so that they can set rates for their customers.

MyRadar offers a similar opt-in function, as does Life360, which gathers “geolocation and mobile device sensor data” that permits Arity to “work with participating insurance companies to better understand how you behave behind the wheel and make offers based on how you drive.”

While these mechanisms technically provide an opportunity to consent to or reject Arita’s data mining efforts, it is not hard to see how users may “consent” without fully comprehending what that means or its negative impact on their car insurance rates.

Can You “Opt Out” of Transferring Smartphone App Driving Data?

As you might expect, numerous critics contend that users of these smartphone apps may be unwittingly surrendering their data to their own detriment. Nevertheless, Arity insists that anyone can “opt out” of the data transfer component of apps like Life360, where subscribers can select “Do Not Sell or Share My Personal Information” in the “privacy and security” settings.

Furthermore, Arity claims that it requires “specific, opt-in consent before sharing a member’s personal driving data for personalized insurance quotes” and “take[s] steps with its partners” to identify apps like Life360 as the source of any data that factors into premium calculation.

“For the use of personalized auto insurance pricing,” the company adds that “consumers must clearly and explicitly opt-in to have Arity create and send a summary of their driving data via the Arity IQ network, and consumers can request a copy of this driving report once they opt-in to share their driving data for a personalized insurance quote.”

Because of these and other safeguards, Arita argues that “personally identifiable driving data” is not shared “with insurance companies to influence our members’ insurance premiums unless a member explicitly requests that we do so.”

Ultimately, users of these smartphone apps appear to have some options if they hope to keep their private information private, though they should probably act before an oversight costs them dearly.

Our Indiana Car Accident Lawyers Will Be Here

Yet no matter what smartphone apps you download or precautions you take, the fact remains that a serious car accident might still occur and turn your whole world upside down, but the Indiana car accident lawyers at Hensley Legal Group will be here to set things right again.

To schedule a free consultation with a dedicated Indiana car accident attorney, just call us at (317) 472-3333, chat with us online, or fill out our contact form now.