Allstate Screws California!

Allstate screws California

May 11th 2007 9:26AM by Jon Ogg

Filed under: Products and services, Consumer experience, Marketing and advertising, Allstate Corp (ALL)

If you are an Allstate Corp. (NYSE: ALL) customer in California for homeowners’ insurance, you have a new reason to hate insurance companies. The company is going to halt new homeowners and landlord package insurance policies in the state.

Here is the quote from the company: “Allstate is taking responsible action now so that the company will continue to be in a strong position to help protect customers in California and across the country. This new strategy helps protect our existing customers and provides an alternative to California consumers looking for new property insurance policies.”

TRANSLATION: We don’t want the risks of mudslides, earthquakes, brushfires and replacing drastically overpriced house values.

Allstate claims that this does not affect existing policy holders and it claims it will continue to renew the existing policies … “subject to applicable Allstate underwriting guidelines.”

TRANSLATION: If we can mark this up massively and determine that you are not a risk, then we’ll underwrite you.

This is an outright exit no matter how the company sugarcoats it. Anyone who doesn’t believe that is the same sort that will buy the London Bridge.

Allstate says it will continue offering auto, renters, life, and other forms of insurance. What if you have all of your coverage with Allstate like many do? You’ll go elsewhere. Allstate is even setting up a referral program for customers to find new coverage. Sorry, but how helpful does anyone think this will really be?

This is obviously good for the company’s bottom line; Allstate’s bean counters seem to have made a compelling enough case for the management to risk the negative PR. Good for them, bad for California.