Allstate tries to fix public relations blunder

The insurer shows ads featuring the home of policyholders hit by Superstorm Sandy. But those customers are irate over how their claim was handled.

By Jonathan Berr Jan 8, 2013 3:40PM
An Allstate logo is shown in at an office in Slidell, Louisiana (LM Otero/AP Photo)Allstate (ALL) has removed a picture of a New York home from an ad touting its response to Superstorm Sandy because the property owners are fuming over how the insurer handled their claim.

Sheila and Dominic Traina were offered $100,000 by Allstate to pay for damage their Staten Island, N.Y., home sustained from the October storm, according to the New York Post. That's a fraction of what the home is worth.

According to Trulia.com, the average price for homes in Staten Island sold between September and November 2012 ranged from $238,730 and $825,020. Seeing their home in the Allstate ad upset the Trainas, the Post says. "I got disgusted,” Dominic Traina is quoted by the Post as saying. Allstate, which called its ad "1,000 Thank Yous," is trying to make amends to the couple.

"The advertisement in question showed general images of the destruction caused by Sandy including a partial image of the Trainas' home," writes Linda Strykowski, a company spokeswoman, in an email. "It does not reference them as customers or in any way imply they are satisfied with the status of their claim. We regret any concern this advertisement may have caused the Trainas and images of their home will not be included in Allstate's advertising."

A phone number listed for the Trainas was out of service. Sadly, the problem that the Trainas is experiencing is a common one. Policyholders and insurance companies are often at odds over what is wind damage and what is flood damage. Traditional homeowner insurance covers damage caused by wind but not flooding. People who are vulnerable to flooding are required to buy separate flood insurance, coverage which the Trainas decided to drop before Sandy struck, according to the Chicago Tribune. 

President Obama recently signed a bill to pay for $9.7 billion in flood insurance claims related to Sandy. Insurance losses related to the storm are expected to top $20 billion. In a separate matter, flood insurance rates may rise as much as 20% in a given year, twice as high as was previously allowed, because last year's passage of the Biggert-Waters Flood Insurance Reform Act of 2012.

--Jonathan Berr does not own shares of the listed stocks.  Follow him on Twitter @jdberr.


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Tags: Insurance
54Comments
Jan 8, 2013 6:58PM
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People always drop their flood insurance thinking it wont happen to them, or because local taxes and the economy make them decide its not that important.  A lot of them also expect the Fed will bail them out if they are flooded.  Its a bad decision, then they get into a war with the insurance company trying to convince them all the damage is from wind.  Its common.
Jan 8, 2013 6:52PM
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Insurance is nothing more than legalized gambling that bets your premiums against a loss.

The deck is automatically stacked against you in the form of micro print on your policy and the house always wins those bets. They have rich investors to answer to after all.

In the case of a wide spread catastrophe like Sandy and Katrina, the insurance companies always recoup their losses by jacking up the rates on every policy they write. So, they get rich while you get screwed.

You can protect yourself by not living anywhere near a flood plain.

Jan 8, 2013 6:47PM
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The fun has just started.  There are stories in many papers how the Insurance Industry is hiring what is known as "Forensic Meteorologists" whose main function is to re-create the storm, etc aimed exclusively at allowing for the fine, stalwart insurance industry to back out of meeting its coverage obligations to the many policy holders.  Yes, the fun has just started when the public really needs/requires the benefits many have paid for over the course of years, and a catastrophic event occurs, look for them to squirm out of paying, spending tons of money in attempt at avoiding their obligations.
Jan 8, 2013 6:22PM
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Is there any doubt that insurance companies do their best not to pay what they owe? If some terrible event happens in this country do you honestly think the insurance companies will pay off? I doubt it. We should have switched over to public coops years ago. 
Jan 8, 2013 6:21PM
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Allstate the company most sued by their insured's and the state of California after every

major fire.  If you think you are in good hands you are wrong.

Jan 8, 2013 6:18PM
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Had A--state. Vehicle was stolen so had claim with auto policy and homeowners both. They low balled claim for 18 mos. After fighting with them for over a year, I finally got state insurance commission involved. After they looked at some of my paperwork it took but 1 call from them and the claim was settled for my $ figure. I then got them involved in the homeowners part of claim and magically that amount was also increased to very close to my number. I will never be insured by those thieves again. If you are ever unfortunate enough to need them or any ins co. don't settle for the first low number. Get several estimates and then if you need to call your state ins commission for help. 
Jan 8, 2013 5:56PM
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ive had allstate for ten years never had a problem you always have some idiot who wants more than they deserve  sn of revolution want be able to get insurance soon hes an idiot the best advice is to stay with one company that pays good and alstate is killer coverage i have over 600,00 in products covered and there always there for me when i have a claim  cheap is not always the best you get what you pay for
Jan 8, 2013 5:39PM
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If they didn't have flood insurance, and their house got, not only blown down, but flooded, what do you expect from the insurance company?? 

Maybe they should have considered that living around water, flood insurance might have been a good thing to keep...

Jan 8, 2013 5:36PM
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Well. if the prez is going to pay uninsured flood claims with tax payer money, why should we buy insurance anyway.
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If they dropped their coverage, what right do they have to bitch about what they are offered.
Jan 8, 2013 5:17PM
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Ummmm if you live anywhere that has the name "island" in there... ummm you may want to have and keep your flood insurance.

Just saying...

Jan 8, 2013 5:13PM
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I dropped them when they started the good driver rewards program but I didn't qualify because I was already  a customer
Jan 8, 2013 5:04PM
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They talked me into an "accident forgiveness" rider on my policy which jacked up the price.  When I had a very minor scratch to another car in a parking lot, not only did they raise my rates but they fooled around so long about making payment that the owner of the other car started to threaten to sue me.  When I called Allstate to ask why my rates had gone up despite "accident forgiveness", they had some story that I cannot recount because it was so ludicrous.  I will never get insurance through them again.
Jan 8, 2013 4:59PM
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I'm not saying Allstate is good but like the article said every home needs wind and flood insurance. Did they have flood insurance ??   No! So what was Allstate supposed to do-pay for flood damage? All insurance companies are the same-they will rip you off if they can. But lets face it -if you don't have flood insurance and you live in an area where it could flood you should have it. I am curious what Allstate would have paid if they had flood insurance. Also there commercials used to say "You're in good hands with allstate"  now they say "are you in good hands?" apparently not.
Jan 8, 2013 4:58PM
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nobody treats you like allstate. I consider them to be the worst insurance company in America to deal with.
Jan 8, 2013 4:48PM
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insurance companies are scam artists....they use your credit rating to calculate your auto insurance premiums instead of just your driving record....jerks
Jan 8, 2013 4:46PM
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their "good hands" are those of a pickpocket
Jan 8, 2013 4:45PM
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Allstate is a company of theives

 

I dumped them because EVERY policy I had with them was TWICE the cost of their competition.

 

Advice to all...get 3 or 4 quotes EVERY year and switch.

Jan 8, 2013 3:57PM
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Absolutely take away the double dipping in our retirement system by government officials and those elected-take away the double-dipping that has gone on for years with State and county employees---15 years here-full pension---then 10-15 years and another full pension----and out to the tune of 4-6K a month----all compliments of the taxpayers.  Level the playing the field--every one pays into SS and no double dipping--you want extra, you save it yourself---and lets stop letting the immigrants take our money----there are billions out the door right there---

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