Allstate Homeowners Insurance Florida

Bad Drivers May Be Asked to Pay More For Homeowners Insurance

The burgeoning business of predicting risk is a sprawling and sometimes intrusive one. Some insurers and even employers use credit reporting data to try and gauge if a person will be a careful driver, or a dependable worker. A risk-prediction model even has been developed by credit scoring company FICO to determine if patients will take their medication as directed by a doctor. But should car insurance companies use your driving record to figure out how much to charge you for homeowners insurance? Does a fender-bender in your past make you more likely to have a tree land on your roof or a flood in your basement? Insurance giant Allstate thinks so, and consumer advocates are angry.  . Of course, having multiple policies with the same carrier is nothing new; for years, insurance companies have offered discounts to incentivize drivers and homeowners to combine their coverage. In this case, the difference is that the customer’s record of car accidents — or “auto loss history,” in industry parlance — dictates how much they’ll have to shell out to get coverage for the roof over their heads.

“Allstate data shows a strong correlation between auto loss history and the likelihood of covered homeowners losses,” the company said in a statement. “Allstate’s new homeowners product recognizes this correlation and rewards customers who have good auto loss histories with lower homeowner rates.”

( MORE:   Your Credit History Is More Revealing Than You Think )

Joe Ridout, spokesperson for watchdog group Consumer Action, isn’t convinced. “Insurers are often seeking ways they can increase premiums,” he says.

Ridout points to recent statements made by Allstate chairman, president and CEO Thomas Wilson during an earnings conference call earlier this month. “We must continue to raise returns from the homeowners and annuity businesses. At the same time, we need to grow insurance premiums,” he said. The company would accomplish this in a number of ways, he continued, including “making sure we keep average premiums headed up and increasing the number of multiline households.

Allstate's House & Home program ... - Insurance Quotes

Consumer advocates raise the roof over Allstate’s new home insurance rule

Aaron Crowe

Some homeowners soon may see their insurance-related costs go through the roof.

Eventually, Allstate customers with roofs more than 10 years old won’t have the full cost of new roofs covered under their home insurance policies . Allstate’s House & Home program will pay the “actual cash value” of a roof that needs to be replaced if it’s older than 10 years. Bottom line: Homeowners will foot the bill for expenses beyond the claim payout for an older damaged roof whose value has been depreciated.

The program was launched in Oklahoma in October. Allstate plans to gradually expand it nationwide over the next three years, spokesman Kevin Smith says.

‘Strong correlation’ between auto and home

Another new wrinkle in Allstate’s home insurance coverage: Your driving record will be used to set your home insurance rates. A good driving record may mean a price break on your home insurance, while a bad driving record may penalize you financially.

Smith says Allstate has found “a strong correlation between auto loss history and the likelihood of covered homeowner’s losses. Allstate’s new homeowner’s product recognizes this correlation and rewards customers who have good auto loss histories with lower homeowner rates.”

Making that type of correlation wrongly pins blame on policyholders, says Birny Birnbaum, executive director of the nonprofit Center for Economic Justice . “Insurance is about spreading risk. Insurance isn’t about finding a different rate for different customers,” Birnbaum says.

Turning a profit

In a conference call with Wall Street analysts Feb. 2, Allstate CEO Thomas Wilson said the company’s new way of dealing with roof losses will help it be profitable. A roof is one of the costliest items for a home insurer to replace.

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