Smart Auto Insurance Blog

Allstate Insurance continued its crackdown of insurance fraud in New York state to close out 2011.  Many insurance companies have a big problem with insurance fraud because of the no-fault coverage issued in the state of New York, according to Insurance News Net’s “Allstate Files $1.1M Insurance Fraud Case in NY.”  This most recent lawsuit for $1.1 million is against sixteen people accused of falsely running companies they said were owned by a medical doctor in order to submit false claims to Allstate.  This is Allstate’s ninth insurance fraud lawsuit in New York this year and their thirty-sixth since 2007.

Unfortunately, no-fault auto insurance has been causing a fraud nightmare in the state of New York for years.  Consumers in New York pay more for their auto insurance because there is so much fraud, dubbed a ‘fraud tax’ by some.  An Allstate spokesperson urges New York lawmakers to enact and enforce regulation that will eliminate no-fault insurance or find a way to eliminate the fraud it is causing.

This most recent scheme involved multiple small companies and individuals sending medical claims and referrals in violation of the no-fault law.  Everything was under the guise of a named medical doctor who does not really exist.  Allstate’s Special Investigative Unit filed this lawsuit to recoup the more than $1 million it feels it lost.  Allstate Insurance is joined by many other insurers, like Donegal Insurance, and state leaders in New York in their battle to reform the no-fault auto insurance system.

Written by Sara Smart

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Allstate auto insurance announced earlier this week that they are purchasing Esurance and Answer Financial from White Mountains Insurance Group according to the article found on USAToday.com.  Allstate is purchasing the companies for about $1 billion and they said the deal will help them obtain customers who prefer certain brands and value choices.

White Mountains Insurance is based in Hanover, New Hampshire and they expect to see an increase in their book value by $80 per share.  Esurance sells auto insurance directly to drivers through the internet as well as through extensive call centers.  Answer Financial is the independent insurance agency.

This is a big deal and both parties will be affected.  Allstate has agreed to pay $700 million plus the net value of the companies.  The price altogether will be around $1 billion.  Spokeswoman Maryellen Thielen says Allstate expects the deal to reduce earnings the first year or so after the deal closes, but after the first year earning should not drop.  Allstate’s first quarter profit more than quadrupled because it paid out less money for claims.  This profit was way above Wall Street’s expectations.  All in all this is a good step for Allstate who expects to see this acquisition benefit the company in the long term.

Allstate Auto Insurance, which is a very well respected insurance company, has created an innovative policy for their customers.  The policy is called Your Choice Auto and it provides high quality auto insurance.  Their website provides more details, but here are the highlights:

• Accident forgiveness helps to keep rates low even after one accident
• Safe driving bonus earns you cash for safe driving
• Deductible rewards gives you up to $500 off your deductible for safe driving
• New car replacement gives you a new car if yours is totaled within the 1st three model years

There are numerous different packages offered through the Your Choice Auto program.  According to their website, those who switched to Allstate from another carrier saved on average $480 per year.  Getting auto insurance quotes from a few different companies is the best way to ensure you are getting the most competitive auto insurance rate.

According to insurancejournal.com, the Colorado Division of Insurance has announced that Allstate Insurance Company is lowering their auto insurance rates in Colorado.  The rate reduction will save Colorado drivers almost $7million in premiums.

Allstate cited favorable claims loss experience over the past few years which has allowed them to profitably lower their rates for private passenger auto insurance.

Based on 2003 market share data, the top automobile insurance companies in Colorado were:  State Farm (23.3% market share), Farmers (14.4%) American Family (10.4%) and Allstate (8.1%)

More information about Colorado Auto Insurance.

In an effort to fight global warming, the Washington State legislature is considering a bill that would allow auto insurers to use electronic monitoring devices to charge different rates based on a person’s actual driving habits, reports the Seattle Times‘ Chantal Anderson. Individuals who have reduced their car usage (by using bikes or public transportation to commute to work, for example) could save up to 15% on their Washington auto insurance premiums.

Auto insurance companies that are offering or planning to offer pay-as-you-drive programs in other states include Progressive Insurance (through its Progressive MyRate program), Allstate auto insurance, Hartford insurance, and Unigard. Progressive wants to keep its proprietary rating information confidential, and the senate bill will be rewritten to reflect those concerns.

Chantal reports that the bill looks likely to pass the state Senate, but could face opposition in the House. Privacy advocates are worried about the “Big Brother” potential of the tracking devices, although the data allowed to be collected and the ways in which it can be used must be approved by the insurance commissioner.