ALLSTATE TO REFUND $3.44M:

According to the Texas Attorney General’s Office, Allstate and its affiliated insurance companies agreed to a settlement that will result in refunds of $3.44 million to more than 23,000 Texas auto policyholders who paid more on claims for vehicle repairs than was required under their policies. The Allstate agreement marks the 12th such settlement obtained since 2000 with major auto insurers. The companies engaged in a practice known as “betterment,” supposedly increasing the value of a policyholder’s vehicle by using better or newer parts. The AG’s office stated that companies such as Allstate then routinely reduced the amount paid for repairs by an amount believed to equal the improved value of the vehicle because upgraded parts were installed, such as new rather than rebuilt transmissions. Texas Attorney General Greg Abbott has argued insurance companies have merely increased the value of the replaced part, and not the entire vehicle, as they claim. Under the settlement, Allstate and its affiliated auto insurance companies will refrain from deducting for betterment on policyholders’ claims. The company agrees to refund the full amount charged for betterment, plus interest, to policyholders who had auto repair claims paid from Jan. 1, 1997, to the present. Allstate will mail checks directly to policyholders who are eligible for payment under the settlement. This settlement will not affect the company’s current insurance rates. The company will also pay $175,000 in attorneys’ fees and other expenses to the AG’s office. The settlement does not require Allstate to admit liability or wrongdoing. The companies named in the settlement are Allstate County Mutual Insurance Co., Allstate Indemnity Co., Allstate Life Insurance Co., Allstate National Insurance Co., Allstate Property and Casualty Insurance Co., Allstate Texas Lloyds Inc. and Allstate Insurance Co.

Topics Texas Auto