Free Apps Could Be Raising Your Car Insurance Rates Without You Knowing
Did you know the free apps on your phone could be spying on your driving habits and selling that data to insurance companies? Apps like Life360 and GasBuddy, marketed as tools for tracking family safety or finding cheap gas, might be doing way more than you think. Atlanta resident Larry Johnson found this out the hard way.
Johnson had been using Life360 to keep track of his family’s whereabouts. But when he was quoted unexpectedly high car insurance rates, he was told he had a “low insurance score.” Confused, he dug deeper and discovered the app had been tracking his family’s driving behaviors and sharing the data with insurance companies. While this kind of data sharing is unsettling enough, here’s the thing to remember—even if insurers use your data to analyze your behavior, your rates are only directly impacted if you’ve opted into a telematics or usage-based insurance program. The uproar stems from how the data is collected and shared, not necessarily the idea of usage-based insurance itself.
How Do These Apps Collect Data?
Apps like Life360, GasBuddy, and even certain weather apps contain tracking software that records details like your location, speed, braking habits, and more. According to Moneywise.com, this information is collected through GPS and motion sensors and then sold to third-party data brokers. Companies like Arity, a subsidiary of Allstate Insurance, compile and analyze this data into driving profiles, which are sold to insurers.
The controversy isn’t just about selling the data; it’s about the sources of the data. For telematics programs run by insurers, you usually have to opt in, knowingly agreeing to share your driving data in exchange for rates based on your habits. But with data collected through unrelated apps, users don’t realize this information is being monitored and passed along. Imagine a single abrupt stop to avoid hitting a hazard being part of your driving profile!
Is This All Legal?
You might wonder, “Don’t apps have to tell me this?” Technically, yes. But these details are often buried deep in lengthy terms of service documents we rarely read. Texas Attorney General Ken Paxton even filed a lawsuit against Arity, alleging they violated laws requiring clear notice and consent.
According to Paxton, “The personal data of millions of Americans was sold to insurance companies without their knowledge or consent.” That’s far from the transparency users expect when downloading something as benign as a gas-price tracker or a family safety app.
How Does This Affect Your Insurance Rates?
Here’s the key takeaway—not all this data directly affects your premiums. Insurers can gather information from these apps to evaluate your risk profile, but for your actual rates to change, you’d typically need to be in a telematics or usage-based program where you agree to rates being adjusted based on specific driving behaviors. The uproar occurs because app users are often unaware that their data is even part of this equation.
For instance, one woman faced issues in a telematics program because her car’s automatic braking system activated, flagging her for “erratic” driving. But, if you haven’t opted into such a program, your premiums shouldn’t be directly influenced. That said, the way insurers source and interpret this data is still a concern for many.
Johnson, the Atlanta father, deleted Life360 after learning what it was sharing. “It feels like a violation. I don’t mind signing up for something when I know what I’m getting myself into,” he said.
What Can You Do About It?
Want to protect yourself? Start by managing your digital footprint. Apps often bury their tracking policies in the fine print, but it’s worth reviewing them before downloading anything.
Here are a few steps to take control of your data:
- Check app privacy policies and look for data-sharing details.
- Opt out of location tracking unless it’s necessary.
- Seek apps that allow you to opt out of data sales.
- Regularly audit your installed apps and remove ones you don’t use.
Johnson now makes a habit of checking app settings for data-sharing options. “If I see it tracks data and doesn’t give me a way to opt out, I simply don’t use it,” he explained.
What’s Being Done?
Lawmakers are starting to address the issue. The bipartisan DELETE Act, introduced by U.S. Senator Jon Ossoff, aims to regulate data brokers and give consumers control over their personal info. If passed, it would allow people to request data be deleted and even join a “do not track” registry.
“Data brokers are buying, collecting, and reselling vast amounts of personal information about all of us without our consent,” Ossoff said. “This bill is about returning control of our personal data to us.”
The Bottom Line
While telematics and usage-based insurance programs can offer personalized rates in exchange for your driving data, the real concern lies in how that data is being sourced without clear consent. Free apps might sound convenient, but there’s often a hidden cost of compromised privacy.
Protecting yourself starts with staying informed. By understanding what data is collected and taking steps to control how it’s shared, you can safeguard not only your privacy but also your wallet. Because at the end of the day, your driving habits should stay between you and the road.