You pay nothing unless we win. Tell us about your serious injury or wrongful death. 404-531-9700

Allstate Forced to Cut California Premiums 15.9%

On March 19, 2008, California Insurance Commissioner Steve Poizner announced he was forcing Allstate Corporation to reduce insurance rates in California by 15.9% “It was very clear that they were charging too much,” said Douglas Heller, executive director of the Foundation for Taxpayer & Consumer Rights.
The order, which came at the close of a lengthy proceeding before an administrative law judge, was more than twice what the Northbrook, Ill., company wanted to grant its policyholders.

According to the order issued by Poizner on Friday, Allstate had requested permission to lower its rates by 7.1%. The department’s rate-setting formula calculated that a 19.4% reduction was merited. After months of legal arguments, a state administrative law judge ordered the final rate reduced 5.9%.

Why are Allstate’s rates so high that it requires a forced reduction by California’s Insurance Commissioner? Because under Allstate’s claims handling process implemented in the early 1990s, Allstate’s claims payments have dropped to approximately 50% of the level they were at in 1992. At the same time, Allstate has requested over 700 rate increases throughout the country. The system implemented by Allstate to help cut claims so deeply, was developed by the same consultant used by State Farm, Liberty Mutual, USAA, and others.

Something to keep in mind next time you hear insurance companies complaining about business.

Facebook
Twitter
LinkedIn