For Immediate Release: September 15, 2010
Contacts: Kristin Milam or Kerry Hall: 919-807-6011
More Than 1,800 N.C. Consumers to Receive Refunds Totaling $680,718.22
Insurance Commissioner Goodwin announces refunds after complaint investigation reveals excessive charges to Allstate policies.
RALEIGH -- Insurance Commissioner Wayne Goodwin today announced that 1,803 Allstate Insurance Company policy holders in North Carolina will receive refunds totaling $680,718.22 after a Department of Insurance complaint investigation revealed the company was overcharging some auto insurance premiums.
"I'm proud that the Department of Insurance identified this rating error and worked to put money back into the hands of consumers," said Commissioner Goodwin. "Everyone makes mistakes, even insurance companies. That's why the Department of Insurance is here - we work every day to find these kinds of mistakes, make sure companies fix them, and protect consumers across North Carolina from future errors."
The Department's investigation revealed that Allstate was inappropriately including rental car costs (referred to as "loss of use/rental reimbursement") when calculating property damage claim totals. Loss of use/rental reimbursement is not allowed to be considered when calculating property damage totals. Allstate's miscalculations occurred in 1,803 policies from July 2005 to July 2008.
Vehicle crashes that produce property damage costs in excess of $1,800 automatically apply two Safe Driver Incentive Points to the insurance policy; damages resulting in less than $1,800 worth of property damage may be eligible for an SDIP waiver. SDIP points can result in higher auto insurance premiums.
The Department of Insurance became aware of the overcharges when researching a routine consumer complaint to the agency's Consumer Services Division. The complaint investigation led to a larger review of Allstate's practices. As soon as Allstate became aware of the rating error, the company amended the situation and began processing premium credits and refunds.
Consumers with questions or complaints about their insurance should call the Department's Consumer Helpline, 1-800-546-5664 (in-state toll free) or visit the N.C. Dept. of Insurance Consumer Services Division Web site.