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There is no doubt the “good hands” people have been using them to pick Californian pockets.

Allstate Insurance Company was ordered to reduce their homeowner’s rates by $255 million statewide by the California Department of Insurance. Now the question remains whether it will issue the refunds owed their customers.More than 850,000 customers will see their insurance rates reduced by about $250 as a result of the order. The order represents a 28.5% reduction in the cost of homeowner’s insurance premiums. Incredulously, Allstate initially sought a 9.3% increase in premiums.

This is the second time in less than a year that Allstate was found to be overcharging its customers. In March, the Department of Insurance ordered the company to reduce its auto rates by 15.9%, saving Allstate auto customers $124 per car.

The real story is that Allstate has taken its sweet time in reducing these excessive rates. Allstate initially sued the Department of Insurance for reducing their rates, but later dropped its appeal.

The acrimony between Allstate and the California Department of Insurance has been going on for three years. Lt. Governor, and former Insurance Commissioner John Garamendi, rightfully called for the company to issue refunds to consumers for the last three years. That’s how long Allstate has been overcharging customers while it fought the Department.

“The company has pocketed far more of the policyholders’ money than was warranted,” Garmendi said. “But, frankly, they must in my view provide a rebate for the three years in which they charged an illegal amount.”

Now it will be up to a Republican, Insurance Commissioner Steve Poizner, to see those past illicit gains are not kept by the rogue company and that refunds are issued in a timely manner to the victims of Allstates’ excesses.

But the real heroes of this story are the folks at Consumer Watchdog, a group led by Harvey Rosenfield, Doug Heller, Jamie Court and Pam Pressley. Rosenfield, especially, deserves credit for crafting Proposition 103.

Proposition 103 provided for an elected Insurance Commissioner in the State of California. More importantly, it gave the Commissioner the power to lower rates when they were excessive.

So far, Proposition 103 has saved California Consumers over $62 Billion. In addition, Consumer Watchdog and their folks will take the lead in holding the current Commissioner accountable for making sure that Allstate refunds its illegal overcharges.

This should not be difficult. The current Republican Commissioner has been outspoken in his desire to seek refunds from the company and he has seen, first hand, the arrogance and intransigence Allstate has demonstrated since he took office.

Further, Consumer Watchdog is already leading the charge to get these refunds for victims of Allstate. Initially, the group had put the issue of refunds on hold until the California Department of Insurance determined the excessive rate issue. Now they are free to pursue claims against the company because of the provisions of Proposition 103.

Allstate is sure to fight back. They take a no-hold barred approach to their fight. Earlier this year Allstate made good on its pledge to pull out of the property insurance business in California altogether. A move that was designed to scare Californians into meeting Allstate’s demand for excessive rates.

But the numbers don’t lie. In 2006 Allstate took in over $5 billion. The total shareholder return from 1994-2006 was a whopping 590%. It is noteworthy that Allstate can give-up the California market and still make billions of dollars.

“Allstate boasted of record profits to Wall Street, then came to California claiming it’s not making enough money in order to charge its policyholders higher premiums. Proposition 103’s prohibition on excessive rates protected California consumers with home and auto insurance policies from Allstate’s price gouging and saved them over half a billion dollars this year,” said Pamela Pressley, litigation director at Consumer Watchdog.

But Allstate, incredulously, still claims increases are necessary. And there are troubling signs at the Department of Insurance that the current Commissioner is tacking right in an effort to please his Republican breathren in order to position himself for Governor.

Poizner, who came to the office as a moderate and promised to run the department in a nonpartisan manner, recently has looked increasingly like the old Republican model — including taking a position as Co-chair of the John McCain Campaign Committee and putting part of his vast personal fortune into rightwing Republican registration efforts.

But the most disturbing signs of trouble come in the recent reorganization of his executive staff, as two major consumer advocates have left the department. Moreover, there are troubling signs that he has left the day to day operations in the hands of a longtime Republican idealogue, Jim Richardson, who is the former chief of staff to archconservative and former Republican minority leader Jim Brulte, while Poizner campaigns for Governor.

But one can only assess a politician’s record by results and, so far, Poizner’s actions in recovering excessive claims from thieves like Allstate have been good, but it is not over by a longshot.

So we need to be vigilant in helping Consumer Watchdog in its quest to get the current Commissioner to fulfill the promises of his campaign. If he does so, he just might become Governor.

In the meantime, next time you see the your friends with the “good hands”–keep yours in your pocket, lest they pick them clean again.

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Richard Alexander