Allstate Insurance Company Temporarily Banned From Writing New Motor Vehicle Policies in Florida
Allstate Insurance Company is the second biggest insurance company in Florida in terms of writing insurance policies for motor vehicle coverage. When you get in an injury accident with another person who has an Allstate liability insurance policy, you would make a claim against Allstate for your damages from the accident, typically for some amount less than or equal to the dollar amount of the insurance coverage.
Recently, the Florida Office of Insurance Regulation (OIR) decided to sanction Allstate by preventing the insurance company from issuing new insurance policies in Florida. This decision was upheld by a Florida appellate court. The decision banning Allstate from writing new policies was based on the fact that Allstate had failed to produce documents that had been subpoenaed pursuant to an investigation by the OIR into how Allstate sets its insurance rates and whether Allstate's customers were being defrauded. The ban against Allstate was lifted after a short period of time when Allstate filed a sworn affidavit indicating it had complied with the subpoena and produced the required documents.
According to the Florida appellate court, Allstate intentionally failed to disclose the required documents which obstructed the investigation into allegations that Allstate was defrauding its customers with its excessive insurance rates. Florida Governor Crist described Allstate's practices as "horrific." Apparently, Allstate made $1.8 billion in insurance premiums in Florida in 2007. Allstate also sought to increase their insurance premiums by 42% when recent Florida legislation was passed in 2007 to get insurance companies to reduce insurance premiums.
