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Allstate dumps the unbundled

By Jay MacDonald · Bankrate.com
Friday, December 2, 2011
Posted: 10 am ET

Some Allstate home insurance customers are being shown the door by the "Good Hands" people for refusing to bundle their homeowners insurance and auto insurance policies.

Insurance Journal reports that Allstate recently informed some 45,000 North Carolina customers that it will not renew their homeowners insurance policies unless they also purchase commercial or private auto insurance coverage with the company by Dec. 15.

Allstate says the move will enable it to better serve its 400,000 in-state homeowners. Minus the unbundled, of course.

Robert Hunter, director of insurance for the Consumer Federation of America, says the "Good Hands" people are simply cherry-picking the more lucrative customers who bundle their home and auto with the company.

He may be right. Presumably, the company has made no similar moves to jettison auto policyholders who insure their homes with other carriers. After all, home insurance is where the big bucks live.

Insurance Journal reader reaction was mixed. A sampling:

  • "It is my belief that this action is a violation of more than (2) North Carolina insurance laws. First, it is considered an inducement … to buy their auto insurance through Allstate. Second, this action could be in violation of both North Carolina and federal 'Unfair Trade Practices.'"
  • "Next they will require a life insurance policy to write a homeowners."
  • "More carriers should follow their move across the entire country. If they did perhaps rates would level out and come down slightly."
  • "I think it is entirely fair that Allstate is doing this. I don't think it's fair that State Farm insures a person's home while they have their auto with Geico or Progressive, neither of whom sell home insurance, which is the most difficult to buy."

Insurance bundling continues to be a bewildering mess for consumers. It's opaque, driven by introductory offers that quickly evaporate, making it well-neigh impossible to compare rates. While most of us do bundle our home and auto coverage, many if not most would save on out-of-pocket premiums by unbundling. That said, trust and convenience factors convince the majority of us to bundle, even if we know we could pay less if we didn't.

That said, in my view it's one thing for an insurance company to offer a bundled "discount" and quite another to drop policyholders for refusing to bundle. While I'm sure it makes sense to the Allstate number-crunchers, I'm doubtful they factored in the potential brand damage from this poorly timed move.

Have you or someone you know been served with this arm-twist ultimatum from the "Good Hands" folks? I'd welcome your thoughts.

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227 Comments
ralph
January 27, 2012 at 4:35 pm

When I worked at Allstate, everybody (who would admit it) had State Farm insurance. There were good reasons.

Jane
January 27, 2012 at 2:12 pm

Michael Kaufman...I so empathize with your story...it must be terrible to be disabled and unable to tackle what life throws at you. But I have to ask, where is your family in this situation? You mention sending kids to college. Any kid over 6 can replace a toilet handle. Where is your wife in all this? I'm a woman and I replaced the water intake valve on my furnace, electric and all. They must pick up some of the slack, at least on the little jobs. Please don't take it all on your own shoulders.

JustFollowing
January 27, 2012 at 12:28 pm

AllState can do whatever the hell it wants. And, the consumer can, too. If you don't like AllState, then you go somewhere else. That's why you shop around and ask questions about their service from a variety of people. If there's misrepresentation and/or fraud, there's court. Last time I checked AllState didn't put a gun to your head to do business with them, and I wouldn't put a gun to their head to do business with me. Where the hell has this country gone? Communist?

armordolls
January 27, 2012 at 9:36 am

Insurance is a like blue sky. You pay and a pay and whe n you need it, they light the oven. Its a racket, same as health insurance. all prices with hospitals abd doctors, pharma are fixed. , They know exactly what they are going to get out of you. And now we have t he tribal executioner who is going to finish us and our bank accounts off. So Insurance of any kind has now become the guards i n the concentration camps,with goverment being the executioner.

Michael Kaufman
January 27, 2012 at 8:37 am

I live in Frederick City, Maryland and I am disabled, blind and unable to walk. I've been bedridden for over 2 years. I do not insure my cars with Allstate but I have insured 2 houses with Allstate for close to 20 years. It's hard for me to read my mail, I have to use jewelers’ goggles to greatly magnify any text I read so I don't always get to my mail immediately. Anyway, I received a letter from Allstate that they sent an inspector over to one of my houses and trespassed onto my property to inspect it and all without my permission. It happened to be the residence I live in. Anyway they said in their letter that my house failed the inspection and they required me to fix my front door that they said is rotting. It clearly is not and isn't close to rotting. They said that all my windows needed to be painted as well as my front door and all my trim work while just last year I replaced 2 large windows, one small one and had all the windows caulked. I live in a Historic section of town so believe me if anything needs up kept or repaired I have no choice but to do it. They wanted me to repaint the whole house while it was built in 1901 out of brick and has never been painted. Actually the Historic Society prefers I don't paint the structure and all the brickwork and grouting is in perfect condition, on all four sides. Allstate also told me I needed some trim work replaced on the upper level as if I didn't already know this. As I said, I'm disabled as of 5 years ago and I went from 90K a year to 20K a year and I worked for over 35 years. I have my 40 quarters for social security but I don't even bother to collect what's rightfully mine. I worked for the Government for over 25 years and was forced out so I decided not to fight it anymore and I retired on disability because I have Diabetes, Neuropathy, Blindness, Charcot, 3 Heart Attacks, 3 Stents and Clinical Depression, and the last three conditions didn't even occur until the Government heavily stressed me for two years, even though all the years I worked there I always got outstanding reviews except the last two years so they could blackmail me out. Now, on my small pension I still make my house payments every month on time and I also pay more than 3k a year for hospitalization for a government HMO that I can't even afford half my prescriptions, calculated on their 3 tier system, $7, $25, $50 or more. Of course more than half are in the $25 to $50 or more categories so I simply don't buy them, my family has to eat. Any dreams I might of had for putting my two daughters thru college are now gone. I've always paid my Allstate premiums on time and they're going to tell me that these repairs have to be made or they are going to drop me. The city of Frederick even understands my predicament and has agreed to let me fix the several small cosmetic trivialities as I can afford them each year so next summer I will finish them. I use to do all my repairs myself before I got sick but now I have to hire people to do the simplest of things because I cannot grip or use tools anymore not to mention that I'm half blind and have lost my sense of balance and I have no friends or people who will help me unless I'm willing to pay top dollar. Imagine having to pay a plumber $150 dollars or more just to replace the broken handle on my toilet when I already have the part which cost $6 and is a 5 minute job. So please excuse me for being so cynical but I TRUELY WORRY and PRAY for my kids because I could die anytime and I can't protect them in anyway. Greed and Capitalism has taken over this country and these people just don't care beyond anyone but themselves and their money, the One Percent. Anyway I have a theory and I bet you I'm not too far off and it wouldn't surprise me if Allstate is in bed with Bank of America because at least once a month I receive letters from Bank of America asking me to refinance my house loan at rates that are good but still higher than the loan I already have. My credit score is above 800 and that's why I got such a great rate but why would I do this and start all over when I have less than 5 years left until I'm paid off. You see, they don't like me because I've never defaulted on a loan and simply put, BOA is not making any money off of me or at least as much as they want to so imagine this. Allstate drops my insurance which is a requisite to owning the lone, now BOA can start proceedings to foreclose on the loan because under the terms of the contract, I defaulted on my home insurance and that's all BOA needs to foreclose my home loan and then they give Allstate a kickback and BOA either forces me to refinance under their terms or they just resell my house for cheap because let's face it, I've already paid off most of the interest and any money they make off the sale is money in their pockets and they get to collect 5 years sooner when they really need the money. Well I could care less because I didn't take out this loan under them but by a mortgage company that they bought out knowing that this mortgage company had thousands of defaulted loans. Go figure? BOA obviously bought out (can't remember their name now but I know they were the largest mortgage company in the United States ever) this company because they had figured out another angle of how to make more money out of this transaction and by the way, BOA bought them well after the Housing Bubble Burst and at least 2 years after the market collapsed so they knew what they were getting into. Oh well, they fired BOA's CEO a year later. Over the almost 20 year period that I let Allstate insure my homes, I never collected anything and I never had an inspection or an inspector trespass on my property without my permission. So let's hope Allstate goes the way of Netflix and loses half of their business because of their arrogance. It's a long post so thank you to the ones who read it thru and please, beware. Thank you and thank you Occupy Wall Street.
Sincerely, Michael Kaufman

Troy
January 26, 2012 at 10:00 pm

I was an Allstate agent for 3 yrs. They were a terrible company to work for. I had been an agent with American Family Ins and very successful. I was convinced to switch over and "own" my own book of business and was going to have the ability to buy up other books. I had a great first year and then the compnay CHANGED! We couldn't write a thing and were losing business like crazy. Managers not returning calls and the sales force floundering. We lost over 200 agents in MO in 2007 ALONE! I sold my book in 2008 and bought a liquor store. Left insurance all together. The person who bought my book, sold out and left the company as well. HORRIBLE COMPANY!

Frankie Guinle
January 26, 2012 at 9:55 pm

Allstate will never change. 40 years ago we had 2 houses, a boat and a car with Allstate. They "failed to renew" our boat insurance because of "claim activity" (someone stole out outboard motor). They said we were fine with our other policies. I said no we werent and cancelled everything. I have been badmouthing them ever since

kkong
January 26, 2012 at 8:57 pm

Now, we'll get to see if Obama's surreptitiously appointed "consumer protection chief" is worth a plugged nickle.

Kevin
January 26, 2012 at 8:37 pm

Sounds like a tie-in arrangement in which you are required to buy something you don't want in order to buy something you do. And that is a violation of the unfair practices act. As a consumer, I should have the right to shop around for the best prices for the INDIVIDUAL pieces of coverage I need. If the bundle is the best deal, all is well. If it's not ....

j martin
January 26, 2012 at 6:19 pm

We were never not even notified in time to try to bundle if we wanted to. By time i got the letter, it was past the experation date. Way to go Allstate! YOU SUCK!!