Allstate Rate Increase

By  | 

Allstate representatives say last hurricane season wiped them out. Now the company's dropping 95,000 policyholders and increasing their rates by an average of 28 percent.

Long-time Florida resident Dawn Aycock has been with Allstate for more than 20 years, and in that time has never filed a home insurance claim, so when Allstate sent her a letter this week telling her she had been dropped as a policyholder, Aycock was appalled.

"You don't punish those of us who have never made a claim by charging us more or putting us with a company we don't even know," says Dawn Aycock.

Allstate didn't have anyone available to talk on camera, but a spokesman says last year's storm season wiped out every cent of profits the company had made since Hurricane Andrew in 1992. They had to raise rates and drop thousands of policyholders so they could pay any claims from this season's hurricanes.

Florida Chief Financial Officer Tom Gallagher doesn't buy it. He points to the company's own financial statements that 2004 was a great year, and Allstate is generating solid returns for investors.

"This is a company that says one thing to their analysts and investors and something else to their policy holders and sticking them with the bill," says Tom Gallagher.

Or dropping policyholders altogether. Aycock agrees it's not justified.

"I had all my insurance with them. That is definitely going to change, because I'm not going to have car or life insurance with a company that drops a loyal policyholder because of a home insurance policy," says Aycock.

Tom Gallagher says a new law requires a public hearing for any rate increase over 15 percent. He's urging the office of insurance regulation to order Allstate not to raise rates at least until after a public hearing, and then take a good hard look at whether the increase is really justified.