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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
Laina
January 30, 2012 at 1:23 pm

Allstate...pay pay pay. Just don't ever NEED them. Those good hands will smack you up the side of your injured head.
Florida EX Allstate client...

Vince
January 30, 2012 at 12:47 pm

Never did like Allstate, I was denied coverage in the state of New York but had coverage in another state. Their policies are ridiculous and I would never use them for any of my insurance needs. Good hands is when they are padding their wallets with all the suckers they say they are taking care of. Any retribution of this fallout will be well deserved.

Andrew
January 30, 2012 at 12:17 pm

Here we are complaining about being forced to purchase health insurance now look at Allstate. Let's hear the out cry America. Let's hear the out cry! Please be fair. Jim

Joe
January 30, 2012 at 11:02 am

25 year with allstate this is not a good but greedy idea

michelle
January 29, 2012 at 10:02 pm

There is no such thing as "good hands" when it comes to autoinsurance, especially when they are forcing you to bundle or forcing you out the door. The practice should be illegal.

Bobby
January 29, 2012 at 10:35 am

Whenever young people come to me for advice of any kind, I always include this: "Remember, your bank and your insurance company are not your friend. The more business you do with either the more you realize the truth of this statement."

Steve
January 29, 2012 at 7:40 am

I refuse to do business with anyone who is going to tell me what I can and cannot do in regards to my insurance, What if I am and elderly person and don't own a car anymore? If the home policy is titled in the man's name and the cars are titled in the wife's name? Insurance companies are among the most dispicable companies on this planet, most of them anyway, they will look for any excuse, fair or not, to avoid paying a claim! But you better not be a day late on your payment or you are up the proverbial creek!

Aaron
January 28, 2012 at 1:11 pm

You're in good hands.... Just not with us.... Go find someone else.

Jack Hamilson
January 28, 2012 at 1:31 am

In the future, people will have company "sponsors". You pay them for all of your basic services. You won't have a choice to split up the services. Internet, insurance, your bank, your dentist, etc. All the same company. The ultimate fruit of a refusal to regulate.

helen roberts
January 27, 2012 at 7:48 pm

I was recently asked by Allstate to show proof that I still had a house alarm
system in order to keep receiving my auto insurance discount.