Wednesday, September 06, 2006

More Bad Press for Allstate, But Who Really Cares?

Allstate made record profits in 2005, and if I had no moral scruples, I'd invest in the company. It is a great investment if all you are interested in is profit. I should start an insurance company of my own, where I take payments, but don't live up to any contract. And my angst is toward the corporation, as the people who we have met who work Allstate are sympathetic and nice by and large. But it is one year after Katrina, and still they won't honor thousands of contracts here in New Orleans and the Gulf Coast. And now they're trying to get out of 30,000 contracts in the region. Here in Louisiana, a 1992 law says an insurance company can only drop policy holders with a 3 year tenure if they 1. Don't pay their bills, 2. commit fraud, 3. have more than 2 claims in 3 years, 4. the insurance company would go bankrupt if it kept the customers. But now Allstate wants to pull out of Louisiana and have a state run agency take over, which would greatly increase the cost to the insured. It boils down to this bizarre fact: if you have car insurance through Allstate, they keep you, if you don't, you're history. Ironically, we have car insurance through our nemesis Allstate, and so we still have insurance for our severely damaged home. Insurance from what I'm not sure. What exactly would it take for Allstate to live up to their end of the contract? A hurricane and subsequent flood waters caused severe structural damage to our house, and they won't address these issues. Instead, they thought it was a good business practice to hire Haag Engineering to claim that Katrina and the flood didn't cause any damage to the structure of our house. We keep paying our premiums because we don't know what else to do. But let me tell you, if a meteor fell on our car tonight, and then the fire destroyed our home, I doubt very much whether Allstate would pay us. We're covered in our minds, but they'd find ways to get out of the contract.


Anonymous said...

See, Allstate's not in the business of paying claims. Their business is collecting premiums. I can see how you might be confused.

My car insurance is Progressive and my Homeowner's is with Allstate, but they renewed me. Doubled the premium but, as I had nowhere else to go, I had to stick with them. I'm on the Northshore and they did still have to (finally) pay a good-sized claim on my house, so maybe there's a different set of rules (go figure) for Orleans.

BTW, I'm a long-time lurker. Really like your blog.

Anonymous said...

I think we're all a bit confused about who the policy is really intended to cover. We're under the mistaken impression that because our signature is on the contract, that it's meant to protect us from loss. But I now think of it this way. Your lender requires you to carry the insurance. And they only really care that you carry enough to cover their risk.

When I was fighting my flood adjustment I had a conversion with my local insurance agent. I told her that if this went on, I was considering involving my mortgage lender. They were in for the overwhelming bulk of the loan so I figured if push came to shove, they wouldn't relish foreclosure on a property worth less than half of the value of the loan while I declared bankruptcy. She was sympathetic, of course, and luckily I have no idea if it would have worked or not. Harsh math, but you only live once and if you get pushed into a corner, you fight and fight hard.

Like your blog, by the way. Here is my own commentary on related matters (and a link back to your post)

melshae said...

Allsnake bites everyone, not just victims of natural disasters. It's been over a year since the major burglary of my home, 3 burglars have been caught, I've spent 80k replacing things, and they still haven't paid one dime. I'm going to give WaMu and Wells Fargo, my mortgagors, the direct line to the insurance "adjustor" (who always adjust it to ZERO) as my home phone number, then quit paying my mortgage. If they want to know why I defaulted, it's because the insurance they made me pay for didn't PAY ME. If they don't want to deal with foreclosing on a home worth 100k less than what I bought it for, they can talk to Allstate.

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