Allstate class action lawsuit overview:
- Who: Two drivers filed a class action lawsuit against Allstate Property and Casualty Insurance Company.
- Why: They claim Allstate car insurance failed to fully reimburse rental car expenses for drivers involved in accidents with its insureds.
- Where: The Allstate class action lawsuit was filed in Illinois federal court.
A new class action lawsuit alleges Allstate Property and Casualty Insurance Company promised full rental car reimbursement, then refused to pay the rate it negotiated with its preferred vendor.
Plaintiffs Jose Arce and Daniel Jackson claim they were each in accidents caused by drivers with Allstate car insurance, and that Allstate arranged their rental reservations through a preferred vendor, Enterprise, while their vehicles were under repair.
Arce and Jackson accepted the vehicles Enterprise offered under Allstate’s reservations. Arce rented a Mazda CX-5 for eight days and was charged $352.46, while Jackson rented a Nissan Altima for 24 days and was charged $824.73.
According to the Allstate class action lawsuit, Allstate reimbursed Arce only $267.24 and Jackson only $732.35, leaving them $85.22 and $92.38 short despite rates Allstate negotiated with Enterprise.
The class action lawsuit alleges that Allstate responded: “We’ve provided compensation at a rate of $28.31 per day. After reviewing the cost of the vehicle you rented, we’ve determined that it exceeds the reasonable amount we would typically pay for the loss of use of the damaged vehicle.”
Arce and Jackson want to represent a nationwide class of drivers not insured by Allstate who were reimbursed for a rental car at less than the negotiated rate after accidents with Allstate-insured drivers, as well as matching New York and Alabama subclasses.
Class action: Allstate blamed plaintiff for choosing a larger rental vehicle
After Allstate underpaid him, Arce filed complaints with the New York Attorney General’s Office and the state’s Department of Financial Services. Allstate allegedly told the Attorney General’s Office it had agreed to a $27.75-per-day “intermediate” rate and argued Arce “elected to obtain a larger vehicle.”
The Allstate class action lawsuit alleges this response is misleading because Enterprise lists no clearly defined “intermediate” gas-powered vehicle class, and both cars offered to Arce were SUVs, not standard cars.
Plaintiffs allege the rental rates Allstate car insurance refused to reimburse were at or below market prices. A comparable midsize SUV topped $631 for Arce’s rental period, and a Nissan Altima like Jackson’s topped $1,200 for a similar window — both above what Allstate paid.
The class action lawsuit alleges Allstate breached the implied covenant of good faith and fair dealing, or alternatively committed promissory estoppel, violating New York General Business Law Section 349 and Alabama’s Deceptive Trade Practices Act.
The plaintiffs demand a jury trial and seek class certification, declaratory relief and compensatory, statutory and treble damages for themselves and the class.
Earlier this year, a federal judge granted preliminary approval to a class action settlement resolving claims State Farm underpaid policyholders for total loss vehicle claims.
Have you been shorted on a rental car reimbursement by Allstate or another insurer? Let us know in the comments.
The plaintiffs are represented by Adam T. Savett, Chet B. Waldman and Matthew Insley-Pruitt of Wolf Popper LLP.
The Allstate class action lawsuit is Arce, et al. v. Allstate Property and Casualty Insurance Company, Case No. 1:26-cv-10127, in the U.S. District Court for the Northern District of Illinois.
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