Allstate Insurance Cancels Homeowners Policies

NC homeowners dumped by insurance companies

CHARLOTTE, NC (WBTV) - Several major insurance companies are dropping coverage for homeowners if residents don't choose to bundle car insurance together with their homeowner policies.

Allstate, which insures 400,000 households in North Carolina, recently decided to drop 46,000 homeowner insurance plans.

"By and large, the biggest thing is that we want to make sure we are able to protect all of our customers," said Tracy Owens, a spokesman for Allstate.

Owens said the company decided to cancel plans that did not include car insurance.  Customers were given 60 days notice and were offered quotes from other companies as alternatives.

"There's nothing the customer has done wrong," said Mike McGee, a broker with Charlotte Insurance. "Frankly, there's a lot of companies doing it. It's not a single decision by one company."

McGee said more companies are choosing not to renew homeowners insurance unless you also have car insurance with them.

He said the decision is about money. Homeowners insurance has become less profitable to sell. In North Carolina, floods, hail, hurricanes, and tornadoes have hit the insurance industry hard.

"Over the last few years the losses have been very heavy, so the companies are trying to create reserves to make up for the losses they've suffered," said McGee.

While Allstate may be the most recent company to ditch thousands of homeowner insurance plans, it's certainly not the only one.  Farm Bureau, another major insurance provider in the state, is making similar moves.  A Farm Bureau executive recently told a state legislative committee his company would have to drastically cut back on its homeowner insurance policy writing if changes aren't made in the insurance industry.

Depending on the company, homeowners who receive cancellation notices may have the option to add car insurance and stick with the same company.  Otherwise, they must find another insurance agency.

Allstate canceling North Carolina homeowners policies not bundled ...

The Fayetteville woman said she had insured her home through Allstate for 27 years and had never filed a claim.

So she was startled when the insurer contacted her several weeks ago to say it wouldn't be renewing her policy.

The reason? She didn't have car insurance through Allstate as well.

She's among nearly 46,000 North Carolinians whose home insurance policies with Allstate are being canceled because they don't also have auto insurance through the company. Allstate, which held the fourth largest share of the state's homeowners insurance market in 2010, isn't alone. N.C. Farm Bureau Mutual Insurance Co., which had the third largest share of the homeowners insurance market in 2010, planned to make a similar move with about 28,000 policyholders starting Jan. 1.

Allstate spokesman Tracy Owens said the company made the move in order to remain financially strong.

"Basically, we have to meet the needs of 400,000 households across North Carolina," he said.

The company decided early in 2011 that it would drop homeowner policies which weren't bundled with an auto insurance policy, starting with policies that renewed on or after June 19. Affected policy holders were notified by letter two months ahead of time and were given an option of transferring their business to Universal North America.

Owens said he expected Universal's prices to be "somewhat similar" to Allstate's but said individual policyholders' prices would vary because of that company's particular underwriting guidelines.

"Every company rates a little differently," he said. "I can't say if it will be higher or lower."

The affected Allstate customers included 30,400 homeowners policies, 10,500 landlord policies and 4,900 mobile home policies. They weren't given the option of buying car insurance through Allstate in order to keep their homeowners policies.

"We didn't want people to feel coerced," Owens said.

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