The Value of Geolocation Data in Claims Investigations

Geolocation data is transforming insurance for both carriers and customers, offering new tools to enhance claims investigations and improve outcomes. By analyzing a property’s exact location or a driver’s travel patterns, insurers can more accurately price risk, prevent fraud, and speed up claims investigations. For policyholders, the same technology enables fairer premiums, faster service, safer outcomes, and even support in theft recovery. It’s a powerful tool, but one that must be used responsibly, with transparency and respect for consumer privacy.

How Geolocation Data Strengthens Claims Investigations

Geolocation technology enables insurers to determine the precise location of a device using GPS, Wi-Fi, or cell tower data. For claims professionals, this capability helps validate details, streamline claims investigations, prevent fraud, and improve outcomes.

Imagine a policyholder calls to report a car crash at 2:30 pm. Geolocation gives claims teams the power to:

• Verify location and timing: Confirm whether the claimant’s device was at the reported accident site at the specified time.
• Detect staging patterns: Identify recurring claims from unusual locations, which may indicate fraudulent activity.
• Cross check disability and injury claims: Analyze movement data to assess the consistency of mobility-related claims.
• Improve decision-making speed: By providing real-time location insights, claims teams can accelerate investigations and reduce delays in payouts.

When used effectively, geolocation accelerates investigations, enhances decision-making, and helps reduce false claims, benefiting both insurers and honest claimants.

The Customer Advantage

Geolocation not only benefits carriers but also delivers real value to customers. Here’s how:

• Fairer premiums through more accurate risk assessment: By analyzing travel patterns and location-specific risk factors, insurers can offer more personalized and equitable pricing. Telematics programs, for example, help insurers better understand driving behavior, leading to fairer premiums and reducing adverse selection.
• Enhanced claim service and speed: Real-time location insights help claims teams validate accident details more efficiently, expediting claims resolution and improving customer satisfaction in urgent situations.
• Better theft recovery: Geolocation data can be used proactively in theft situations, such as stolen vehicles, enabling quicker recovery and minimizing loss for policyholders.
• Transparency and trust: When insurers are upfront about how location data is used and provide simple opt-in/opt-out choices policyholders gain both empowerment and trust. The Federal Trade Commission (FTC) has emphasized that clear disclosures are key to protecting consumers from misuse of geolocation data.

For policyholders, geolocation data delivers tangible wins: fairer pricing, faster claims, safer outcomes, and stronger privacy protections. Together, these benefits can make insurance feel less transactional and more service-oriented, enhancing trust and satisfaction.

Legal and Privacy Risks of Geolocation Data

While geolocation data offers significant advantages, its use is increasingly scrutinized under evolving privacy laws. Insurers must navigate this complex legal terrain while conducting claims investigations that involve geolocation data.

California: SB 354 – Insurance Consumer Privacy Protection Act of 2025

In April 2025, California passed SB 354, the Insurance Consumer Privacy Protection Act of 2025, marking a significant step in strengthening privacy controls within the insurance industry. This classifies geolocation data as sensitive personal information, imposing strict regulations on its collection, sharing, and retention. Key provisions include:

• Clear privacy notices: Insurers must provide transparent privacy notices detailing their data practices, including the types of information collected and how it is used.
• Data minimization: Collection of geolocation data must be limited to what is reasonably necessary for underwriting and claims processing purposes.
• Consumer rights: Consumers are granted rights to know when their geolocation data has influenced underwriting decisions or coverage actions.

SB 354 prohibits insurers from selling consumer personal information and mandates that contracts with third-party service providers clearly govern the processing of personal information. Violations can result in penalties up to $1 million, underscoring the importance of compliance for insurers operating in California.

Texas: The Texas Data Privacy and Security Act (TDPSA)

The Texas Data Privacy and Security Act, which took effect in July 2024, establishes comprehensive standards for how personal data, including geolocation data, can be collected, used, and shared. The law requires companies to:

• Provide clear, accessible notices explaining data collection practices.
• Obtain informed consent before collecting sensitive personal information.
• Limit data use to what is reasonably necessary for the stated business purpose.

For insurers, the TDPSA highlights the importance of ensuring transparency in geolocation practices, particularly in fraud detection and claims management. Compliance not only reduces legal risk but also reinforces consumer trust.

Together, these two laws signal a broader national trend toward heightened scrutiny of geolocation practices, making proactive compliance a strategic imperative for insurers.

Best Practices for Geolocation Data in Claims Investigations

Geolocation is powerful, but without safeguards it can backfire. Insurers that want to stay ahead should ground their use of geolocation in proven best practices that protect both the company and the consumer.

1. Transparency Builds Trust

Consumers don’t want to feel like they’re being watched. Clear, plain-language about when and how geolocation data is used goes a long way toward building credibility. According to the FTC, burying details in fine print is one of the fastest paths to regulatory penalties and reputational fallout. When customers understand how their data supports fairer pricing or faster claims, they’re more likely to opt in and feel comfortable staying with their carrier.

2. Get Consent and Keep it Simple

Whenever possible, rely on affirmative opt-in consent. Avoid making policyholders hunt through settings or read long disclaimers. Make opting out easy and honor those choices immediately. Simple, respectful consent processes empower customers, reinforcing that the insurer prioritizes their control and comfort.

3. Partner Carefully with Vendors

Third-party apps, telematics platforms, and analytics providers can offer rich insights but any misstep in data handling is ultimately the insurer’s liability. Contracts should explicitly require vendors to comply with the privacy laws, including data retention, minimization, and security standards. Careful vendor oversight ensures that policyholders’ information is protected no matter who handles it, helping preserve trust in the entire insurance relationship.

4. Collect “Just Enough” Data

More data isn’t always better. The FTC has cautioned businesses against collecting unnecessary data, noting that over-collection not only increases privacy risks but also raises management costs. Insurers should limit collection to the information that’s relevant and necessary for a claim or underwriting decision. Customers feel reassured knowing only the data truly needed to support their claim or policy is being used, which reduces the sense of being over-monitored.

5. Document and Audit Regularly

Every time geolocation influences a claim decision, it should be documented. Regular audits and compliance checks aren’t just formalities, they’re critical protections against regulatory scrutiny, legal challenges, and reputational damage. This proactive approach demonstrates accountability and can help insurers earn customer trust. A well-documented process gives customers confidence that claim outcomes are fair, consistent, and defensible.

Want to learn more about emerging trends in insurance and how technology is shaping claims investigations? Explore our 2025 State of Insurance Report or connect with us.

Check out our sources:

California State Legislature. SB 354: Insurance Consumer Privacy Protection Act of 2025. 2025-2026 Regular Session, https://legiscan.com/CA/text/SB354/id/3180717.

Coalition Against Insurance Fraud. State of Insurance Fraud Technology Study 2024. 2024, https://insurancefraud.org/wp-content/uploads/2024-State-of-Technology-Study.pdf. 

Ethos Risk Services. 2025 State of Insurance Report. 2025, https://ethosrisk.com/state-of-insurance-2025/. 

Federal Trade Commission. “FTC Takes Action Against General Motors for Sharing Drivers’ Precise Location and Driving Behavior Data Without Consent.” Federal Trade Commission, 16 Jan. 2025, https://www.ftc.gov/news-events/news/press-releases/2025/01/ftc-takes-action-against-general-motors-sharing-drivers-precise-location-driving-behavior-data. 

Texas Attorney General Ken Paxton. “Attorney General Ken Paxton Sues Allstate and Arity for Unlawfully Collecting, Using, and Selling Over 45 Million Texans’ Data.” Office of the Attorney General of Texas, 2025, https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-sues-allstate-and-arity-unlawfully-collecting-using-and-selling-over-45.