The Texas Department of Insurance (TDI) and the Office of Public Insurance Counsel (OPIC) announced an agreement with Allstate Texas Lloyd's ("Allstate") to settle all outstanding litigation with respect to homeowners insurance. The agreement provides Texas Allstate policyholders with a total of approximately $71,300,000 in refunds, credits and rate reductions under the following terms:
- Allstate will pay refunds to policyholders totaling $36,800,000 for new and renewal policies written between Dec. 1, 2004 and April 23, 2006. These dates reflect the period of time during which Allstate was charging a rate that TDI believed was excessive. These refunds will be mailed by November 1, 2008.
- Allstate will give credits or refunds to policyholders in the amount of 3.0% of premium for new and renewal policies written between Aug. 20, 2007 and June 1, 2008. These dates reflect the period of time during which Allstate's August 2007 rate filing was in effect. Allstate estimates the value of these refunds and credits to policyholders to be $14,800,000. These credits or refunds will be mailed by Nov. 1, 2008.
- Allstate will reduce its homeowners insurance rates by 3.0% statewide for new and renewal policies written between June 2, 2008 and at least June 1, 2009. Allstate estimates the value to policyholders of this rate reduction to be $19,700,000. Allstate will apply rate reduction rates based on geographical areas to more appropriately reflect expected costs in each area.
- In addition, Allstate has agreed to not increase its homeowners insurance rates during the period between June 2, 2008 and June 1, 2009, barring extraordinary and unforeseen circumstances.
- Eligible policyholders who no longer have insurance through Allstate will receive any refunds owed through company checks. Current eligible policyholders will receive any refunds owed through policy credits and if necessary company checks. All refunds and credits will be issued no later than Nov. 1, 2008.
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