NC Officials: Allstate Can Drop Those Without Bundled Policies

Allstate Insurance is dropping more than 45,000 of its North Carolina residential property policyholders for not also buying their auto coverage through the company, state regulators confirmed Monday.

The move comes as the multiline insurer competes with auto-only coverage providers such as GEICO and Progressive in a market in which vehicle coverage is the preferred line of business, regulators said.

“This is a legal underwriting practice, so long as the policyholder is given at least 30 days notice of nonrenewal,” state Department of Insurance (DOI) spokesman Kerry Hall said in an email.

Sign in front of Allstate corporate headquarters

Photo Courtesy of Allstate

The Illinois-based company began sending nonrenewal notices to customers in March, Hall said, and regulators have gotten about 30 written complaints from consumers. The number of complaints made by phone has not been tracked.

Allstate informed the department that it will not renew about 30,400 homeowner, 10,500 landlord package and 4,900 mobile home policies for customers who have not bundled that coverage with North Carolina auto insurance coverage from the company.

Hall said multiline insurers have altered their underwriting and marketing strategies in order to focus on writing auto and homeowner policies, and some have stopped offering residential and other coverage types if policyholders do not bundle those policies with auto coverage.

“Some companies show the courtesy to DOI of advising us of such strategies, but they are not required to do so, and we keep no such list as to who uses which strategies,” he said.

Allstate has not left homeowners with nowhere to turn, Hall said. The coverage provider has reached an agreement with Universal North America to provide quotes to more than 26,000 homeowners and about 9,300 landlord package policyholders.

Under a separate arrangement, mobile home policyholders may seek coverage through American Modern Insurance Group, according to regulators.

This year has been a turbulent one for Allstate, as the insurer joined the long list of companies reporting major losses from Hurricane Irene and other natural disasters.

The insurance company announced earlier this month that profits for the third quarter of 2011 were down 55 percent from the same period last year, thanks to more than $1 billion in catastrophe losses.

Allstate said it was able offset at least some of the higher losses, thanks in part to the improved profitability on some coverage types in New York and Florida.

But the company had to settle claims filed from numerous natural disasters this year, with Irene alone causing about $500 million in insured losses, a 179 percent increase from June through September last year.

To read the experiences of current and former Allstate policyholders, readers can find user-submitted Allstate auto insurance reviews online.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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