We recently reported on Florida’s investigation of Allstate’s charging increased premiums. Today’s Times Picayune reports Allstate is also in hot water with Louisiana regulators.
Policyholders have filed recent complaints with the Louisiana Department of Insurance because Allstate has been encouraging homeowners to re-write their policies with cheaper premiums but without hurricane coverage. Allstate claims its policyholders were taking out new policies and no longer eligible for state consumer protection rules that apply when the insurer has covered the insured for more than three years. Allstate submits the policyholder can obtain wind and hail coverage in a separate, more expensive policy from Louisiana Citizens Property Insurance Corp. This policy offers only depreciated value coverage instead of replacement value, and does not cover living expenses for policyholders who are displaced from their homes after a storm.
On December 19, 2007, the state regulators ordered Allstate to reinstate wind and hail coverage for seventeen customers who lost this coverage when they obtained new policies with discounted premiums. Allstate has been ordered to respond to the state’s inquiries by January 25, 2008.
