Allstate, Consumer Group at Odds Over Message of Released Documents

But advocates with the Consumer Watchdog group (formerly the Foundation for Taxpayer and Consumer Rights) haven't changed their mind.

In fact, the advocates claim that the released documents only expose a business strategy on the part of the nation's second largest insurer of "systematically underpaying claims to policyholders or forcing them into protracted court battles to secure a fair settlement."

"Thousands of pages of Allstate's internal documents reveal the company's 'Us versus Them' attitude toward its customers," said Carmen Balber with Consumer Watchdog. "Allstate policyholders who paid their premiums faithfully were fleeced while the company underpaid claims and padded profits with the money they owed their customers."

Balber went on to say that the revelations in the released documents "demand that state regulators open examinations of Allstate rates, and require the insurer to refund consumers for overcharges and lower insurance premiums where they have been too high across the country."

That's already happening in California.

In March, the Insurance Commissioner of California ordered a 15.9 percent reduction in Allstate's auto insurance rates that will save policyholders nearly $250 million.

Consumer Watchdog is also challenging Allstate's homeowners insurance rates in the hopes that it can lower rates by more than $300 million.

Regulators and consumer advocates have the ability to challenge unfair insurance rates in California under the state's insurance reform initiative, Proposition 103, which bans excessive profit and requires insurance companies to open the books and justify rates to state regulators and the public.

In 2006, according to company reports sent to Wall Street, Allstate's net income was about $5 billion.

After fighting in courts for more than a decade to keep the documents a secret, Allstate took a different approach by posting them on its Web site. Allstate believes its critics have created an inaccurate picture of the company's claim practices by taking portions of the documents out of context.  

Allstate says its critics are overlooking some key facts. For example,

• As a regulated company, Allstate's claims practices are available to and regularly reviewed by state departments of insurance.
• Allstate resolved millions of homeowners and auto claims last year and continued to earn very high rates of policy renewal. 
• Allstate regularly communicates with its customers and claimants about their claims and what they can expect from the process. 
• Allstate is aggressive in fighting fraud to protect its customers and reduce the cost of insurance. The company employs a special investigative unit whose duty is to identify and combat fraud.
  

"We became the largest publicly held personal lines insurance company in the United States in no small part because we built a reputation of being there for our customers in their time of need by resolving claims fairly, accurately, and in a timely manner," said Allstate spokesperson Rich Halberg. "The fact that we have added millions of new customers over the past 15 years speaks to the outstanding claim service we provide."

A court in Kentucky recently ruled in Allstate's favor in a trial in which the documents took center stage. Some of the Allstate documents were seen and explained in context to a jury during a two-week trial (Hager v. Allstate). The jury unanimously ruled in Allstate's favor.