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Allstate Drops Homeowner Policyholders Who Don’t Buy Their Car Insurance

Allstate saving money by dropping non-bundled insurance buyers in North Carolina and Arkansas

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

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It's happening in Alabama as well. We received a letter from Allstate in September 2011 stating the our homeowner policy would not be renewed in December 2011 due to a property insurance that took place in February 2011. This was the first we had heard of this inspection. The letter claimed the policy would not be renewed because the inspection revealed dry rot, patched areas, and repair cement residue on the roof. This was all seen from the ground. The other reason for opting to not renew our homeowners policy was that the garage door needed paint. The photos of the roof ,submitted as evidence, were taken from ground level, one of them from at least 50 feet away. These photos showed nothing that would indicate the conditions that the inspector claimed he saw. The photo of the garage door was even more ridiculous. My wife had painted all but about 3" at the bottom of the door before running out of paint. When I received the letter I called my agent and disputed the finding, but nothing was done about it. So, I contacted a roofing contractor to inspect the roof and filed a claim for wind and hail damage. The first Allstate adjustor inspected the roof and reported that no damage was found and that the roof looked to be in decent shape. No evidence of the conditions reported by the February property inspector. The roofing contractor suggested that I request a second adjustor's opinion, which I did. The second adjustor agreed with the contractors findings and processed the claim for wind and hail damage. The second adjustor also did not find any evidence of dry rot, patched areas, or repair cement residue. A few days after the repairs were completed our policy came up for renewal and, as promised by Allstate, it was not renewed. Again, I contacted my agent and appealed the decision due to the fact that the decision was based on a bogus inspection in February, as well as the statements from the roofing contractors as well as two Allstate claims adjustors that none of the problems reported by the initial property inspector existed. Allstate sent another property inspector out to verify that the repairs had been completed. A couple of days later my agent called back and told me that Allstate would not renew my homeowners policy unless I also purchased auto insurance from them. The auto insurance quote I received was almost double what we are paying now. Allstate is a horrible company and I would rather pay double my homeowners policy to another company that to switch my auto insurance over to this arrogant entity. .