Delaware Regulators Fine Allstate and Encompass $25,000 Each

Delaware regulators have fined auto insurers Allstate and Encompass a combined $50,000 for violating state insurance laws, with the fines set to quadruple for each company if it repeats the violation within three years.

According to separate consent orders signed in September, Allstate Insurance agreed to pay a fine of $25,000 for failing to provide defensive driving discounts for a full three-year period to qualifying policyholders.

Encompass Insurance, which likewise agreed to pay a $25,000 fine, illegally imposed an accident surcharge on policyholders who were in crashes they did not cause, according to the company’s consent order.

Nearly 3,650 policyholders were affected by the two companies’ missteps.

Both insurers waived their right to administrative hearings and agreed to pay the penalties.

“It’s my job to protect consumers and to make sure insurers get it right,” Delaware Insurance Commissioner Karen Weldin Stewart said in a statement. “I believe imposing these fines will help protect our citizens and prevent future, similar errors.”

Stewart said the companies worked to notify policyholders and issued refunds totaling more than $848,000. Allstate and Encompass cited computer errors and programming oversight as the causes of their violations, according to regulators, and have reportedly fixed those problems.

Stewart said she remains concerned that violations such as Allstate’s could weaken efforts to improve highway safety by getting more Delaware motorists in defensive driving courses.

“What is more, I am committed to making sure that drivers who complete an approved defensive driving course get the discount to which they are lawfully entitled,” she said.

Federal and state safety officials have long encouraged motorists to take advantage of defensive driving training that can not only make them safer on the road but also qualify them for discounts on even the best priced auto insurance policies.

The consent orders contain provisions under which any subsequent violation of the same state law within a three-year period would result in an additional $75,000 fine for each company.

About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

No comments yet.

Comment on this article