IRVING, Texas, Dec. 21 /PRNewswire/ -- The Allstate Corporation
(NYSE: ALL) announced today that its Texas homeowners insurance subsidiary,
Allstate Texas Lloyd's, received Texas Department of Insurance approval on
endorsements that provide broader coverage to the homeowners HO-A insurance
policy. This will create a new product option called the "Allstate
HO-A-Plus." It will give Texas homeowners customers a viable insurance product
with coverage in between the two policy forms previously available in Texas --
the minimal HO-A policy and the more comprehensive HO-B.
Allstate anticipates the HO-A-Plus will cost an average of 20 percent less
than the current Allstate HO-B policy available today. This can help Texas
homeowners better manage their insurance costs while meeting their insurance
needs. The Allstate HO-A-Plus will be the primary product offered by Allstate
to Texas homeowners customers beginning in 2002. Allstate anticipates
offering the HO-A-Plus to new customers in late January and to current
Allstate HO-B customers at renewal beginning in March.
"This is good news for Allstate policyholders in Texas," said Gary Briggs,
Allstate Field Vice President. "We applaud Commissioner Montemayor for
allowing Allstate to offer Texans a new choice for homeowners insurance
coverage."
The Allstate HO-A-Plus will provide a viable product option to the Texas
homeowners insurance marketplace. Specifically, the Allstate HO-A-Plus
includes additions to the existing HO-A policy:
-- Replacement cost coverage for both personal property and the dwelling,
subject to limitation;
-- Protection against perils such as sudden and accidental discharge,
leakage, or overflow of water or steam from within plumbing, heating,
air conditioning systems or household appliances;
-- Protection against freezing of plumbing, heating, air conditioning
systems or household appliances;
-- Protection against building collapse; building glass breakage; falling
objects;
-- Limits are specified for remediation of mold resulting from a covered
water loss ($5,000);
-- Coverage for foundation tear out and replacement (5% of the dwelling
limits or $3,500, whichever is greater) resulting from sudden and
accidental discharge or leakage of water from a plumbing drain system
in or under the slab or the foundation of the dwelling.
"The Allstate HO-A-Plus is a result of innovation by Allstate," said
Briggs. "It clearly shows our desire to alleviate the Texas homeowners
insurance crisis and create solutions that are equitable for our customers and
for our company."
Allstate has seen sharp increases this year in homeowners insurance claims
for water losses and mold damage stemming from those losses. However, other
factors independent of mold are also driving losses in Texas and forced
Allstate to significantly raise rates this year on its HO-B policy. The
general cost of construction and property repair has risen substantially in
Texas. And the potential for property damage due to weather-related
catastrophes such as hailstorms, tornadoes, wind, and hurricanes is greater in
Texas than in almost any other state.
Allstate does not plan to offer the Texas Department of Insurance's
recently modified HO-B policy to Allstate policyholders in Texas. Allstate's
goal continues to be to give consumers insurance they need at an appropriate
price. Long term, Allstate wants to offer Texas consumers more options for
their homeowners insurance. Allstate is in the process of submitting for
review to the Texas Department of Insurance the homeowners contract Allstate
uses in most other states. If adopted by the Commissioner, the proposed
Allstate policy will provide consumers with another viable policy option.
Allstate's use of the HO-A Plus in Texas is intended to help return
Allstate's homeowners business in the state to profitability while providing
its customers with a new choice in the insurance marketplace. It is expected
it may be some time before the full effect of the initiatives is apparent in
the corporation's financial results. The changes take time to implement, and
claims will continue to be reported under the HO-B policies as Texas
homeowners policies renew on an annual basis.
This press release contains a forward-looking statement about the impact
of the introduction of the new policy form in Texas on the financial results
of The Allstate Corporation. The statement is subject to the Private
Securities Litigation Reform Act of 1995 and is based on management's
estimates, assumptions and projections. Management believes that the
introduction of the new policy will help return Allstate's homeowners
insurance business to profitability in Texas. However, losses could continue
at current rates or increase due to a variety of factors, including
weather-related catastrophes such as hailstorms, tornadoes, wind, and
hurricanes. In addition, the return to profitability will be mitigated to the
extent that Allstate continues to face water losses, and mold damage stemming
from those losses, on current HO-B policies that remain in force.
The Allstate Corporation (NYSE: ALL) is the nation's largest publicly held
personal lines insurer. Widely known through the "You're In Good Hands With
Allstate(R)" slogan, Allstate provides insurance products to more than 14
million households and has approximately 13,000 exclusive agents in the U.S.
and Canada. Customers can access Allstate products and services through
Allstate agents, or in select states at allstate.com and 1-800-Allstate(SM).
Encompass(SM) and Deerbrook(SM) Insurance brand property and casualty products
are sold exclusively through independent agents.
SOURCE Allstate Corporation
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CONTACT:
Justin Schmitt of Allstate, +1-972-871-6479
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