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Allstate policy-holders sue over auto premiums
By JEFF HARRINGTON © St. Petersburg Times, published October 3, 2000 Allstate Insurance customer Nora Albaugh, a 68-year-old retiree in St. Petersburg, kept a clean driving record for 30 years, marred only when someone hit her car door in a church parking lot eight years ago. Raymond Corbett, a retired shiprigger supervisor living in Kissimmee, had one traffic citation in 17 years. Yet both of them, and potentially thousands of other Floridians, were labeled as high-risk drivers and unfairly charged extra for insurance by Allstate, according to a lawsuit filed Friday in Pinellas County Circuit Court in Clearwater. The suit contends that the Illinois-based insurance company unfairly used its Allstate Indemnity Co. subsidiary for high-risk drivers as a pool for holding customers who should have qualified for better rates. Under Florida law, insurers are not allowed to use a motor vehicle accident older than three years as a basis for charging additional premiums. Allstate, the second-largest auto insurer in Florida with about 18 percent of the market, collected about $937-million in premiums in the state last year through Allstate Insurance and nearly $500-million in premiums through Allstate Indemnity. The suit claims that Allstate confused customers, using the same sales force and promotional material for its standard policies as it did for high-risk policies. "A person getting a policy doesn't recognize the difference between Allstate Insurance and Allstate Indemnity," said Terry Smiljanich of the Tampa law firm James, Hoyer, Newcomer & Smiljanich, the lead attorney for the plaintiffs. George Grawe, regional counsel for Allstate, said he did not have an opportunity to review the suit and could not comment. The suit was filed independent of an ongoing investigation by the state attorney general and state insurance commissioner into some of the same issues. The state investigation of Allstate focuses on two issues: whether Allstate kept customers in a high-risk category longer than necessary and whether Allstate's property insurance arm sold homeowners more coverage than they needed. Florida Department of Insurance spokeswoman Nina Bottcher said regulators are in the preliminary stage of getting information subpoenaed from Allstate. The Clearwater suit was filed on behalf of three customers: Albaugh, Corbett and Clifton Smith, a 31-year-old Margate resident who was charged Allstate Indemnity rates for seven years despite maintaining a clean driving record. When Smith objected, he said he was told to find another insurer. The suit seeks class-action status for all former or current All-state customers since 1984 who may have been unfairly charged. Damages are not specified but attorneys say it could average several thousand dollars per driver.
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From the Times Business report
From the AP
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