Allstate’s Move in Arkansas Underscores Competition in Auto Insurance Business

Little Rock -- Free-Press-Release.com-- Dec 8, 2011 -- The recent news that Allstate Insurance won’t renew the homeowner policies of about 4,000 Arkansas customers unless they also buy vehicle coverage underscores how competitive business has become for insurers, particularly in states that have been hit hard by natural disasters this year, according to Online Auto Insurance (OAI).

Officials say residential policyholders in the Natural State will be renewed if they decide to purchase Arkansas car insurance as well and that the move is necessary to manage the company’s risk. Allstate has reported more than $1 billion in losses caused by weather-related catastrophes in the third quarter alone.

Those losses put the coverage provider in the same boat as most other insurers, who have seen net income slashed after having to settle claims for damage from tornadoes, tropical storms and other severe weather events.

According to a recent analysis by credit-rating agency A.M. Best, property and casualty insurers lost more than $38 billion before taxes due to natural disasters from January through September. That was almost twice as much as the companies—which insure homes, vehicles and businesses—lost during all of 2010.

Federal authorities say a dozen major catastrophes nationwide this year have resulted in a combined $52 billion in economic damages. The Natural State has been impacted along with other states by four of those events, including Mississippi River flooding in spring and summer and multistate tornado outbreaks in April and May.

Source: http://www.ncdc.noaa.gov/oa/reports/billionz.html

State regulators say companies that provide multiple types of insurance are “streamlining” operations by refusing to cover customers who don’t purchase more than one type of policy from them.

Allstate has sent nonrenewal notices to more than 40,000 of its residential policyholders in North Carolina who haven’t bought vehicle coverage through the company. The Tarheel State was among many along the East Coast that were hit hard in August by Tropical Storm Irene, which caused more than $7 billion in insured losses, according to industry officials.

Allstate announced earlier this year that more than $1.07 billion in catastrophe losses in the year’s third quarter alone had cut its profits for that period by more than half.

To learn more about this and other coverage issues, readers can go to http://www.onlineautoinsurance.com/arkansas/ where they will find informative resource pages and a helpful rate-comparison generator that can quickly evaluate their coverage options.

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Online Auto Insurance
Gregor McGavin
http://www.onlineautoinsurance.com/