Allstate cuts off thousands of home insurance policyholders in North Carolina

John Egan

Allstate is dropping coverage for more than 44,000 policyholders in North Carolina who have home insurance, landlord’s insurance or mobile home insurance but don’t also have auto insurance with Allstate.

“Managing our exposure is necessary to allow Allstate to continue to help provide protection and peace of mind through a variety of insurance products,” Allstate says in a statement.

The North Carolina Department of Insurance says this is perfectly legal, since Allstate gave the policyholders at least 30 days’ notice.

Nonetheless, one consumer advocate complains that Allstate isn’t being fair to its customers.

“Allstate continues its quest of abandoning the coasts of America while still aggressively trying to make more money in auto insurance from the abandoned customers,” says Robert Hunter, director of insurance at the Consumer Federation of America. “People across the nation should be warned that Allstate’s ‘Good Hands’ are working hard to maximize profits, regardless of the impact on customers.”

Beginning with policies up for renewal on or after June 19, 2011, Allstate is exercising its option to not renew coverage for about 44,700 customers in North Carolina who’ve had property insurance but didn’t have auto insurance policies with Allstate effective Dec. 15, 2010. Allstate, the country’s No. 2 home and auto insurer, says it’s making the move to manage its “overall risk” in the property insurance market in North Carolina.

Allstate says most of the affected customers are able to get quotes for property insurance coverage through an agreement with Universal North America Insurance Co., based in Sarasota, Fla. However, the state Department of Insurance advises that Allstate customers aren’t obligated to do business with Universal North America.

“It is up to each individual to decide which companies and policies best fit their needs and wants. Comparison shopping can help you make a good and informed purchase decisions,” says Kerry Hall, a spokeswoman for the Department of Insurance.

Until Allstate took this action, it had more than 400,000 policyholders in North Carolina.

Allstate says it “carefully considered” this step, which “will help ensure Allstate’s continued ability to provide a wide variety of insurance products to North Carolina consumers at a competitive rate, while remaining financially strong in every community we serve.”