Santa Monica, CA — Allstate must repay its California policyholders the $326 million a year it has been overcharging homeowners, said the Foundation for Taxpayer and Consumer Rights (FTCR) in response to today’s order by Insurance Commissioner Poizner requiring Allstate to justify its current premiums or refund excessive rates.
Allstate‘s homeowners business has been extremely profitable in recent years; the company paid out just 33.6 cents on the premium dollar in California homeowners claims in 2005 and just 25 cents on the dollar in 2004.
“It’s time Allstate stopped stalling and repaid the $900,000 a day it is overcharging California homeowners. Allstate‘s outrageous profits on the backs of California homeowners make direct consumer refunds long overdue. We applaud Commissioner Poizner’s actions today,” said Carmen Balber, consumer advocate with FTCR.
Using voter-approved Proposition 103, FTCR has been pushing for a 40% reduction in Allstate‘s homeowners rates, a reduction that would save individual policyholders an average $362 a year. Allstate instead wants a $100 million (12%) increase in rates.
The office of the Insurance Commissioner asked Allstate and three other insurers last year to justify their homeowners insurance rates in light of extraordinary profits. The others agreed to lower rates but Allstate delayed, instead insisting on a rate increase. The delay has allowed the company to continue to overcharge consumers.
Proposition 103 requires insurance companies to justify rate changes prior to imposing increases, and allows consumer groups like FTCR to challenge excessive rates and request public hearings.
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FTCR is California’s leading public interest watchdog. For more information, visit us on the web at www.ConsumerWatchdog.org.