Allstate Considers Auto History to Set Home Insurance Rates

Allstate has made news with a controversial decision to consider driving records and auto insurance claims histories of consumers who apply for its new House & Home product. The product has already made news as critics accuse the company of using it to increase profits at the expense of its customers.

House & Home Relies on Driving and Auto History Correlation

Property and casualty insurer, Allstate, has been in the news lately for its controversial addition of the new House & Home product that is reportedly expected to surge consumer costs due to its requirement for homeowners to pay massive out-of-pocket expenses to have roofs over 10 years old repaired.

Now, it plans to consider driving records and claims histories of consumers who apply for the product because there is “a strong correlation between a good auto loss history and a lower likelihood of homeowners losses,” the company said in a statement. As a result, consumers could pay considerably more depending on their driving history.

The new product is currently available in Oklahoma and Kansas; however, Allstate says it will use this sample testing determine the product’s success and make enhancements. Once it’s ready, the company plans to roll House & Home out to other states through 2014.

Just Another Allstate Profit Scheme?

Critics of the new Allstate product claim the company is altering home insurance coverage in order to earn more money, and interestingly, Allstate has not denied these accusations.

In fact, House & Home, which has been described as “innovative” because it “provides a more comprehensive approach to underwriting in the best interest of customers,” was explained by CEO Thomas Wilson to be a solution to the company’s desire to grow its profits.

The ability to look at a consumer’s auto insurance policy for claims history and driving loss data gives the company an opportunity to charge more based on assumed risk on top of its already-increased costs for roof coverage.

Allstate is not the first company to take the approach of using auto loss information to determine home insurance rates. State Farm revealed it also uses this model to determine rates; however, a spokesperson shared that only a few states are currently doing so.