Maryland Orders Allstate Return $17.5M to Auto Insureds

Maryland Insurance Commissioner R. Steven Orr has ordered Allstate Insurance to return $17.5 million to 20,571 of its auto policyholders in Maryland whom he says were improperly charged.

This restitution is in addition to a $100,000 administrative penalty Allstate agreed to pay.

An investigation by the Maryland Insurance Administration discovered Allstate had sent notices of premium increase between January 1, 2003 and March 1, 2005 that did not comply with Maryland’s law requiring that any premium increase notice disclose a description of the accident or violation which is the basis for the premium increase.

According to Orr, Allstate had until October 3, 2006 to audit policyholder records between January 1, 2003 and March 1, 2005 and make appropriate adjustments, plus interest, on credit or refund amounts due to affected policyholders. This audit resulted in the refund of $17.5 million to Maryland citizens. Affected policyholders have been notified by Allstate.

The probe began with a series of consumer complaints to the department, Orr said.

Source: Maryland Insurance Administration