Effective Jan. 1, 2011, Allstate stopped offering the Your Choice coverage to new customers in California. Existing Your Choice customers will be transitioned to another product as their renewals arrive.
Consumer Watchdog’s press release states, “It is estimated that Allstate was receiving $20 million a year in extra premiums since it began selling the program in California in 2008. Allstate agreed to stop selling the policies rather than face the formal Department of Insurance hearing into the legality of the program requested by Consumer Watchdog.”
The consumer group alleges that, under the YCA program, Allstate charged drivers up to 15% higher-than-normal premiums with the promise that future tickets or accidents would not be used to increase premiums. But Consumer Watchdog goes on to say that their investigation found these purported benefits were not worth the premium being charged.
"Your Choice Auto became a cash cow for Allstate by charging customers more than they should be paying under California's good driver law," Todd Foreman, Consumer Watchdog’s in-house counsel, said. "Only when faced with the threat of having their executives cross-examined about the actual costs and benefits of YCA did Allstate finally agree to take this product off the market."
Allstate’s Mellander says the insurer had been involved in a mediation process with Consumer Watchdog, but “the Consumer Watchdog release is absolutely nothing more than a creative work of fiction."
"We made the decision on our own as a larger business strategy that will enable us to introduce bigger and better products that will serve our customers better and enhances competitive advantage of our agents in California,” Mellander adds.
