Allstate Drops Homeowner Policyholders Who Don’t Buy Their Car Insurance
Insurance companies often offer their clients the option of saving money by bundling policies. The most popular combination is a homeowner’s or tenant’s policy coupled with vehicle insurance. Now, however, Allstate is telling some clients that unless they bundle their policies, Allstate won’t sell them insurance.
A couple of days ago Online Auto Insurance posted an article revealing that state regulators in North Carolina were allowing Allstate to drop 45,000 homeowner policyholders who weren’t also buying vehicle coverage through Allstate. Another article posted on the same site yesterday said they were about to do the same thing in Arkansas. It’s likely other states won’t be far behind.
Unfortunately for its former homeowner policyholders, it’s apparently perfectly legal for Allstate not to renew homeowner policies of those who aren’t opting to also buy vehicle coverage. All they have to do is provide at least 30 days’ notice that the policy won’t be renewed.
Insurers have been hard hit this past year, with many of them losing money thanks to hurricanes and tornadoes. While Allstate is not in the red, its third quarter profits were down considerably from last year, due to over $1 billion in catastrophe losses. Vehicle coverage is more profitable than many other areas, and it seems Allstate is interested in expanding its share of that market.
In North Carolina, that will affect 30,400 homeowner policies, 10,500 landlord policies and 4,900 mobile home policies. About 4,000 Arkansas policyholders will also be affected. Apparently many of them may be able to get coverage with Universal North America or American Modern Insurance Group, thanks to an arrangement with Allstate. Better than nothing, I guess, but with insurance rates rising, it’s a bad time to be cut loose.
Reference: Online Auto Insurance