Allstate to refund $680K to auto customers
Posted September 15, 2010 12:39 p.m. EDT
Raleigh, N.C. — More than 1,800 Allstate Insurance Co. policy holders in North Carolina will receive refunds totaling $680,718 after a state Department of Insurance investigation revealed the company was overcharging some auto insurance premiums, officials said Wednesday.
The investigation revealed that Allstate was wrongly including rental car costs when calculating property damage claim 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, which can lead to higher premiums, while damages resulting in less than $1,800 of damage may be eligible for a waiver on points.
The DOI became aware of the overcharges when researching a consumer complaint. As soon as Allstate became aware of the rating error, the company amended the situation and began processing premium credits and refunds, officials said.
“Everyone makes mistakes, even insurance companies. That’s why the Department of Insurance is here," Insurance Commissioner Wayne Goodwin said in a statement. "We work every day to find these kinds of mistakes, make sure companies fix them and protect consumers across North Carolina from future errors.”