Thursday, February 01, 2007

Allstate Insurance Con Job

Last Summer was not a good time in Combat Philosopher land. The horrors of that period I recounted in my earlier posting "A 'Combat' Summer". It seems that the ripple effects of this period of time continue.

Recently, I received notice of my home owners policy renewal, with The AllState Insurance Company. To my surprise, my insurance has gone up. Last year I paid around $560. This year they want over $1,250! A quick perusal of the AllStateSucks site, tells me I am not alone in getting this kind of surprise.

The problem I have is that there is very little by way of explanation for this sudden increase. There is about $200 in increases that are explained. These are charges related to the State of Louisiana reconstruction, coastal protection and a special program to provide coverage for those individuals who the Insurance industry now refuse to cover. I do not really have a problem with these charges. My socialist inclinations inoculate me from this component of 'sticker shock'. However, I'd love to know what the justification of the increase is.

When I called AllState, they could not provide me with an explanation. They promised to have someone get back to me on this. We shall see. They also said that, because I had three claims in the last two years, this too could be part of the cause.

On the face of it, three claims in two years, does not sound too good. However, this is a classic trick of 'insurance company speak', that is less impressive, when deconstructed. The first claims was for a couple of hundred dollars after the storms of 2005. As my deductible is $500, AllState did not pay me a penny. Thus, this claim is not too impressive.

As for the other two claims, the first occurred when my workshop was broken into. The full cost of that claim (to me, in terms of what I lost) was a little over $1,600. After AllState had finished removing the deductible and depreciating stuff, I got a payment of just over $350. The second claim was for a loss to me of just shy of $900. After all the usual deductions, I got just over $370. Thus, for these putative 'three claims', I lost over $2,500, for which AllState paid me $720!

It seems to me that nearly doubling my premium for this is a bit on the punitive side. Not only that, AllState will get the money they paid me back in about fifteen months. After that, my increased premiums will just contribute to the AllState bottom line.

Of course, in their defence, AllState can whine about risk and losses and all that stuff. In the State of Louisiana, in the year 2005, they did take some hits. These hits were minimised though by their denial of claims, contesting what was wind and what was water damage, and all that. Of course, many insurance companies did this. What I do not get though is why is it that the insurance industry gets to cry and yell when they have to pay out, but nobody gets their money back when there are no major claims. Last time I checked, the insurance companies make a tidy profit almost every year.

I did a bit of looking into the Allstate situation. On their site, they are proud to boast all about how highly their financial strength is rated. They also do not seem to be doing too badly financially. At year end 2006, they had a net income of a mere $4993 million! The poor dears must be feeling better, as in the allegedly 'dreadful' 2005, they still managed to have a net income of $1,765 million. I strongly recommend looking at the numbers, that can be found (in .pdf format) here.

It seems to me that AllState are just a bunch of con artists. They have nice TV commercials, and love their 'corporate responsibility' statements, but when it comes down to it, they are just greedy (or in capitalist speak they 'word hard to ensure shareholder value'). One share in AllState stock is now worth $61.00, so that is fine then.

I will bitch and complain at AllState and begin looking for new insurers. Of course, I have to maintain my policy, at least for now. The folks I feel sorry for are all the people who will not be able to afford insurance, when their premiums double. I will give AllState a bad time, to try and 'persuade' them to review their practices. I will begin with the office of the State insurance commissioner. I doubt I will get anywhere, but it seems like a worthwhile fight. The bastards!

The CP

Update: Well, this post seems to have got AllState's attention. I have had a whole bunch of hits from their machines since I put up this post. It will be interesting to see whether they ever call me back to explain the increase. In the meantime, it is nice to know that they care what is said about them. I would like an explanation from AllState to be posted in the comments section here. I will not hold my breath on this, though. -- The CP.

2 Comments:

Blogger king said...

As the population has gotten older, the need for health insurance has increased. Despite possible changes in the regulatory environment, healthcare is expected to continue its rapid expansion.

10:50 PM  
Anonymous Best term said...

This is really very informative, I just loved reading it, thanks for posting. just keep up the good work, will surely be back again.

5:07 AM  

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