California Allstate Customers Lose Accident Forgiveness Policy

Allstate Insurance Co., along with two related insurance companies, have agreed to stop selling their Your Choice policies. These auto insurance policies, which were provided to a number of California customers, offered the popular “accident forgiveness” feature.

‘Your Choice’ No Longer an Option

Allstate, which currently provides auto insurance, to 1.5 million California households, has stopped offering Your Choice policies to new customers as of Jan. 1, spokesman Bill Mellander said in a recent announcement.

The Your Choice option came with the popular “accident forgiveness” feature touted in commercials that could prevent motorists from seeing automatic premium increases after having an accident or traffic ticket.

Why Allstate is Making the Switch

Allstate’s California auto insurance business is making the switch so that it can “focus on some bigger and better pricing and underwriting practices,” said Mellander.

But policyholder advocates like Santa Monica-based Consumer Watchdog have said the real reason for the switch is that Allstate has been under investigation by the state Department of Insurance in connection with the Your Choice program.

The investigation looked at the accusation that Allstate was charging customers 15 percent more for their coverage with the promise of not increase their rates after an accident or ticket. In other words, Allstate was already making its money and was charging customers whether they had an accident or not.

Approximately 10 percent of Allstate California customers carried the Your Choice policy and therefore will be affected by the switch. The company says that the customers carrying the policy will be phased into a standard policy during the second half of the year.