Allstate Named In Coronavirus Relief Lawsuit
NORTHBROOK, IL — Some major U.S. auto insurance companies — including Northbrook-based Allstate — are facing lawsuits that allege they failed to provide fair and appropriate insurance premium relief to Illinois auto policyholders during the COVID-19 pandemic. Six separate lawsuits were filed by Chicago law firm Romanucci & Blandin, LLC on behalf of insurance customers July 29 in Cook County Circuit Court.
"The current refunds given by the insurance companies are relatively meager when compared to the massive profits reported by these insurance companies — they're nothing more than a marketing ploy," David Neiman, an attorney with Romanucci & Blandin, told Patch. "It will not and cannot be seriously disputed that Illinois drivers are on the road less now than they were pre-pandemic, but they’re still responsible for paying nearly the same premiums for insurance. Illinois consumers deserve to have the scales re-balanced and have billions of dollars put back in their pockets."
Geico and Progressive are also named in the lawsuits.
Each lawsuit refers to Gov. J.B. Pritzker's March 20 executive order requiring Illinois residents to stay at home due to the coronavirus pandemic as having "dramatically" emptied Illinois' roads of vehicle traffic. Miles driven by motorists in the state saw a nearly two-thirds drop in the spring, according to the lawsuits.
"This profound drop in auto insurance claims (as compared to pre-COVID levels) will almost certainly continue for the foreseeable future, and for as long as the COVID crisis continues," the lawsuit reads.
It also states that companies like State Farm gave its policyholders a 25 percent credit on premiums starting in March while Allstate's relief for customers "has been grossly inadequate and designed to secure for Allstate an unearned and unfair windfall." Allstate provided a premium credit of 15 percent for the months of April, May and June, according to the lawsuits.
Patch has reached out to Allstate for comment on this story.
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According to one lawsuit, which names Dino and Katerina Anagnos as plaintiffs, the proposed class action was brought on behalf of all Illinois residents who were auto insurance policyholders of defendant Allstate Fire and Casualty Insurance Company as of March 1, and who have thereafter continued to be Allstate auto policyholders.
The counts against Allstate named in the lawsuits are:
Count I — Declaratory Relief
Count II — Illinois Consumer Fraud and Deceptive Business Practices Act
Count III — Common Law Fraud
Count IV — Bad Faith Breach of Contract
Count V — Unjust Enrichment
"Because of the pandemic, the assumptions made by auto insurers' about future claims in Illinois became dramatically overstated," Neiman, a resident of Deerfield, said. "As a result, the premiums charged to its Illinois policyholders became grossly excessive overnight, not only for new policyholders going forward, but also for existing policyholders whose premiums were based on obsolete claim projections."
Allstate announced Tuesday in a press release to investors that it posted revenues of $10.49 billion for the quarter ending in June. This compares to revenues of $10.82 billion for the same quarter in 2019.
"Allstate's strong results reflect a resilient strategy and rapid adaptation to the coronavirus pandemic," said Tom Wilson, chairman, president and CEO of The Allstate Corporation, in the release. "Customer satisfaction increased as we maintained high service levels and helped customers, including almost $1.0 billion in Shelter-in-Place Payback, payment deferrals and extended coverage."
Neiman said his firm will next move for class certification when the various insurance companies are served and represented.
This article originally appeared on the Northbrook Patch
