Insurer Allstate Corp said it has dropped its bid to fight a reduction on auto policy rates imposed earlier this year by California’s insurance regulator.
An Allstate spokesman, in an e-mailed statement, said the insurer had filed a motion to dismiss the appeal, citing the “best interest of all parties.”
Allstate said it has been complying with California Insurance Commissioner Steve Poizner’s order to cut rates by 15.9 percent since April 2008.
Consumer Watchdog applauded the dismissal of the lawsuit. Said Los Angeles attorney Dan Zohar of the Zohar Law Firm, lead outside counsel for Consumer Watchdog, “With gas prices soaring and the economy on thin ice, it’s about time that California drivers got some good news. Allstate had no proper legal basis for the appeal, and having had a chance to consider their options, they correctly decided to dismiss the challenge to Poizner’s order.”
According to the advocacy group, consumers should see the reductions implemented on all policies renewed on or after April 28, 2008. The average annual policy premium will be reduced approximately $124.
Meanwhile, Consumer Watchdog also challenged Allstate’s proposed rate increase for its 1 million California homeowners. Hearings on the homeowner insurance rates were held in January 2008, and a decision by Poizner is expected sometime this summer. Allstate has proposed to increase its homeowners insurance rates by 9 percent or about $79 million per year, according to Consumer Watchdog. The advocacy group is calling for a 30 percent rate cut, which would provide a premium decrease of about $250 per homeowner.
Allstate, the largest publicly traded U.S. car and home insurer, is the third largest provider of automobile coverage in California with about 2 million customers. The rate cuts are seen saving the state’s drivers about $250 million a year, according to earlier calculations by Poizner’s office.
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