Someone e-mailed us asking about State Farm Insurance, saying they had heard our city had had real difficulties with the firm and wondering if they should cancel their policies in support. I replied that the true culprit–if you ask the average New Orleanian–is Allstate rather than State Farm. (I’ve been a State Farm policyholder for over 30 years and have had only good experiences with them. My home is insured by American National and they were more than fair in our post-hurricane dealings.)
Recently, Allstate sent cancellation notices to 4,772 policyholders in our part of the world, informing homeowners that “since this house is unoccupied” they were ending the policy. The Times-Picayune did story after story on residents who have rebuilt their homes and who have been living in them many months, but who received those cancellations. It turns out that Allstate’s investigators had done drive-by inspections only, spending an average of 60 seconds per house.
Insurance Commissioner Jim Donelon has ordered Allstate to re-instate all those policies immediately and to redo the inspections. Today, Friday, the newspaper announces that the insurance company is appealing that decision to The Division of Administrative Law, a state body which handles disputes with state agencies. A judge will listen to both sides and issue a ruling. The hearing must take place within 30 days.
Earlier, the state had informed insurers that they could begin canceling policies on any damaged property on which repairs had not begun by March 1.
After some 600 policyholders complained to Donelon about the cancellations, he sent his people into the city to test 18 of the complaints. In each case, they reported it should have been obvious to anyone–even sitting in his car on the streets!–that the homes were occupied.
By an odd coincidence, January’s Sugar Bowl in our city was sponsored by Allstate. A number of unhappy policy-holders pointed out the irony of that. I don’t know how long the contract has to run, but I’ll betcha it will not be renewed. This is one company locals do not like.
Quick rundown of local stuff.