Allstate to pay policyholders, reduce rates

The Texas Department of Insurance and Allstate entered into an agreement whereby the insurance giant will refund some money to policyholders and reduce their rates.

The Fort Worth Star-Telegram reports that Allstate must pay $36.8 million in refunds for new and renewal policies written between Dec. 1, 2004 and April 23, 2006; give credits or refunds that amount to 3 percent of premiums for most policies written between Aug. 20, 2007 and June 1, 2008; cut homeowners rates by 3 percent on average statewide for most policies written between June 2, 2008 and at least June 1, 2009; and not increase rates between June 2, 2008 and June 1, 2009.

I’m skeptical of any agreements reached by Big Insurance and the lapdog TDI, particularly knowing how the insurance companies fight meaningful regulation tooth-and-nail. This could be good for consumers or it could just be window dressing (like when TMLTdoubled medical malpractice insurance premiums prior to the “tort deform” debacle of 2003 and then hailed an 11% reduction a year later – yipee).

With all these “reductions,” consumers can go broke saving money.