Allstate finds way around state rule
Transparent Ones,
The Indomitable Mowbray is at it again, telling the story of Michael Scioneaux, an Allstate customer in the same house in Old Gretna for 31 years, who in 2004 took advantage of a discount available to customers with good credit to increase his coverage, and recently learned Allstate was canceling his wind and hail coverage.
The reason? Allstate says when he upgraded his coverage he actually switched to a different Allstate unit, making him a new customer and vulnerable to cancellation despite a state law forbidding cancellations of customers of longer than three-years’ standing.
But Mowbray tells it better than me:
“Thinking it was a mistake, Scioneaux called his insurance agent, Bob Gualtieri. But Gualtieri told him that when he increased the amount of coverage on his house in 2004 and took advantage of a discount offer for customers with good credit, the changes amounted to a new policy in Allstate’s eyes. Scioneaux said he was told by Gualtieri that because he was a new customer, he was out of reach of the state’s special three-year consumer protection law, so Allstate was free to rewrite the policy, putting the wind and hail coverage with Louisiana Citizens Property Insurance Corp.”
I wish there were more to it than that, but Allstate spokeswoman Kate Hollcraft, who doesn’t have the easiest job in the world, says that’s basically the story.
“Allstate has two homeowners insurance companies in Louisiana. A customer in one company may choose to make a change in coverage and apply for a new policy in the other company. There may be benefits to making that switch, but a person is choosing to begin a new policy.”
Hollcraft said that making changes in the amount of the homeowners premium or all-perils deductible could result in the policy being considered a new policy, but she would not say what other types of changes could put customers in jeopardy of losing wind and hail coverage from Allstate.”
Allstate has two companies? And Heather has two mommies. What’s the difference? And how is increasing coverage making a change?
Listen, no need to belabor this. It speaks for itself. This kind of Three-Card-Monte business model is not sustainable, but Allstate has made a strategic decision to switch to life and other products. This is one of those, “because we can” things.
I consulted ITP’s general counsel, Buck, and he said the whole thing is chicken shit. I told him we don’t allow that kind of language on the site, then he accused ITP of being “too close to the Insurance Information Institute,” just because I happen to like Bob Hartwig. I said that was unfair, that the ITP is neutral and that it’s about maintaining some civility. Then he stormed off, and we haven’t heard from him. We’re afraid he’s drinking again. War Eagle just walked over to the Last Exit to see if he’s over there. It’s pretty grim around here.
Thanks to Louisiana Lawyer Supreme, Flood Map Maven and Ida.