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A recent Allstate class action lawsuit claims the insurance company puts some policyholders on a “suckers list,” forcing them to pay high premiums.
According to plaintiffs Sara Shannon, Rosa Palacios and Debra Corbello, consumers on the “suckers list” may be forced to pay up to 850 percent higher, or up to 90 percent lower premiums.
The plaintiffs claim that these “drastically different premiums” are charged for the same policies and the same coverages, despite policyholders having identical situations and risk perspectives.
“Allstate has knowingly betrayed the loyalties of millions of its long-time Texas auto policyholders through its implementation of two related discriminatory schemes, both of which involve Allstate charging higher premiums to its more tenured policyholders than it charges otherwise identically situated newer policyholders for the same or materially the same coverages,” the Allstate premiums class action lawsuit argues.
“As Allstate is well aware, its conduct lacks any actuarial basis (indeed, it defies basic actuarial principles).”
The “suckers list” scheme was reportedly revealed by Consumer Reports and The Markup in a February investigation.
The investigation looked at rates of thousands of insurance documents acquired by the Maryland Insurance Administration when Allstate tried to change its rates several years ago.
Although the rate changes aimed to increase consumer retention, analysis of the documents allegedly showed that big spenders would be faced with significant price increases.
Although Maryland rejected these changes, regulators in Arizona, Arkansas, Illinois, Iowa, Michigan, Missouri, Nebraska, Oklahoma, Tennessee, and Wisconsin reportedly allowed similar plans to move forward. Allstate allegedly refused to tell Consumer Reports whether or not these plans resembled the Maryland plan.
“These revelations are concerning enough on their own, but they’re also an unmistakable harbinger of the new age of consumer threats we’re racing headlong into,” said Marta L. Tellado, President & CEO of Consumer Reports, in a press release.
“Like security flaws in our gadgets and invisible toxins in our food, hidden biases in the algorithms that set more and more of the prices we pay pose an insidious threat.”
According to the Allstate premiums class action lawsuit, Texas consumers are affected by this “suckers list” scheme as well as an “open” or “closed” books scheme.
This scam reportedly separates insurance “books” into “open” or “closed” categories based on the age of a policy. Newer consumers are allegedly given lower premiums while long-term policyholders subsidize the newer customers with higher payments.
“The premiums that Allstate charges new policyholders in the Open Books are generally significantly lower (often, very significantly so) than the premiums Allstate charges existing policyholders in the Closed Books for the same or materially the same coverages,” the Allstate premiums class action lawsuit claims.
These rate differences are allegedly concealed by agents at the direction of Allstate.
In fact, Allstate agents in Texas are reportedly threatened with financial punishment and even agency termination if they deviate from the pricing schemes.
“To ensure that Allstate Texas agents stay in line, Allstate takes aggressive measures to threaten and intimidate the agents to ensure they do not deviate from the playbook,” the Allstate premiums class action lawsuit.
The plaintiffs note that retaliation from Allstate can be “financially devastating to Allstate Texas agents, not just because it affects their income going forward, but also because Allstate requires agents to invest heavily (the agents’ own money) in their agencies despite Allstate retaining the ability to unilaterally terminate the agency.”
Plaintiffs in the Allstate premiums class action lawsuit claim that, “in addition to being disturbingly cynical, unethical, and unfair, Allstate’s conduct,” the schemes violate Texas price optimization laws and insurance code. In fact, the Texas Office of Public Insurance Counsel allegedly confronted Allstate over its price intolerance scheme in 2015.
The plaintiffs seek to represent two Classes of Texas Allstate policyholders who were affected by the alleged open/closed scheme since Jan. 1, 2008 or the alleged price tolerance scheme since June 26, 2014, respectively.
The Allstate premiums class action lawsuit seeks damages, restitution, statutory penalties of up to $25,000 per potential Class Members, interest, attorneys’ fees, and court costs.
Do you pay extremely high Allstate premiums or premiums for another insurance policy? Share your experiences in the comment section below.
Plaintiffs and the proposed Class are represented by John R. Davis and Michael L. Slack of Slack Davis Sanger LLP; Joe K. Longley of Law Offices of Joe K. Longley; and Roger N. Heller and Johnathan D. Selbin of Lieff Cabraser Heimann & Bernstein LLP.
The Allstate Premiums Pricing Class Action Lawsuit is Sara Shannon, et al. v. The Allstate Corp., Case No. 1:20-cv-00448, in U.S. District Court for the Western District of Texas.
UPDATE: On June 26, 2020, Allstate Corporation asked a Texas federal court to dismiss a class action lawsuit alleging that the company engaged in an unfair pricing scheme in which long-term policyholders pay higher rates than newcomers for the same coverage, and keeping a list of customers the company could wring higher premiums out of.
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275 thoughts onAllstate Class Action Says Customers Added to ‘Suckers List’
We have used Allstate for years, but the auto insurance kept going up every year. I am in N.C. the price of other insurance was always lower. It seemed to us that we were being penalized for being a long-term client. So, in 2017, we switched carriers. I still have home owners insurance with Allstate, but have recently been told that this will be increasing as well. I am looking for cheaper home owners insurance now, because I expect it to go up to an enormous amount for no reason.
I used to work for them; constant pressure to underpay claims, and the rote argument that they trained their supervisors to parrot, for pay, “We absolutely want to pay what we owe”. As stated by an earlier poster, the sooner the Hedge Fund scoundrel who drove SEARS into the ground kills what might have been a challenger to Amazon, the better, and if the corporation Allstate could be sucked down with it as a dishonest abuser of the people whom it claims to serve, the better. Dirt-bags.
Actions by Allstate California need to be looked at. I just canceled them after more than 25 years. When I added a new car to my policy they refused to adjust the mileage on the other vehicle I was no longer commuting with. Continued to charge the higher rate for more than 6 months.
I am a 40 year Allstate Customer in VA. Just learned that apparently I have been on the “suckers” list. This year, suspecting I was being overcharged, I asked my agent if he could improve my rates. The agent replied in 2 hours with rates that were 33% lower with exactly the same coverages. When asked to explain, they explained that they are not allowed to offer the new rate tier unless the customer asks for it. Even their new tier/lower rates were still another 40% higher than rate I received from two other Tier 1 insurers. Needless to say, this is my last month with Allstate. Here is a verbatim email from the Agent, again explaining that it is Allstate company policy that they not offer the lower rates unless asked.
PLEASE ADD ME TO ANY CLASS ACTION LAWSUIT ON THIS TOPIC. THIS IS RIDICULOUS. I HAD ALWAYW BELIEVED THAT RATES WERE REGULATED AND STANDARDIZED. THIS WAS A COMPLETE SHOCK TO ME.
_______________________________________
This is verbatim from my local Allstate office
Mr. Etherly,
I am sorry to see you leave us, and I really mean that. I am also honest enough to tell you, in the past we have had clients leave for this very reason. Believe me, we have to work within the company guidelines…I just read your last email. Please let me know if I should accept your prior email as your termination request or if you will send it separately.
Regards,
Betty
Carole ‘Betty’ Holley
Office Manager/Senior License Agent
Insured with Allstate over 30 years, Never even shopped insurance, which is what i assume they count on. Switched all my coverages and saved over 1500.00 per year. Called agent to cancel and they could care less after all these years.
Have had many conversations with my agents about premiums I was being charged for 2 drivers with no claims ,accidents ,tickets.
Hopefully, like SEARS they will be a memory in the near future
ADD ME in VIRGINIA to list
Allstate insurance come is discriminating against the african american homeowner policyholders in ga. My number is 7705728213 if you have any questions, Thank you Eric Clark
I had Allstate for over 20 years. I’ve never gotten a ticket and only once had a claim that was a fault of mine and that was over 15 years ago. My rates went up every six months when it came time to renew. The last time it went up over $75.00 a month. They said it was because my health insurance went up. Michigan is the highest, but they just reformed it and was supposed to go down. I switched to State Farm and it is 2/3 less in cost. I was being scammed
Mr Wilson head of ALLSTATE is a brazen thief. Long list of Federal Judges on his payroll.
Compared to him Bernie Madoff was a boy scout.
I was beginning charged 141.00 a month for ten months I switched to state farm I’m paying 34.00 a month and I cancelled my Allstate before it was past due not even late now they are trying to charge me 49.00 for what I don’t know how can I get in on a class action in south Carolina
Add me
Add me. My Allstate Homeowner’s insurance kept getting higher with less coverage and higher deductibles. It wouldn’t cover my roof that had hail damage in 2009 while everyone in the neighborhood got new roofs. I was sick, my mom was, so I let it go. I thought maybe my roof was nicer!! Then in 6/2018 we had storm & hail damage on our roof and once again they come up with “other” reasons our young contractor had never heard of. It will only pay for 50% and they had raised our deductible Fromm $500 to $2000 without our knowledge. They also raised our premiums as they reduced our coverage including taking out no coverage for any water damage and no coverage for mold ( luckily we’ve had none). We also had a side note of earthquake insurance which was suddenly dropped. I’m in Georgia, but this has been awful. My roof is going to cost us $11800.00 & $5000 inside . I’m sick of their unfair practices so I dropped the house insurance and we’ve had car insurance with them since 1988.
Allstate Insurance is so fraudulent,talking about you’re in good hand. The devil is a liar. I had to pay for my roof replacement. Then I cancelled them. in retaliation they sent a 25 dollar bill in collection