Allstate ordered to pull TV ad on family's lost home

[TexasStooge]

Insurer says it will comply for now but denies it's misleading

By TERRENCE STUTZ / The Dallas Morning News

AUSTIN, Texas – Attorney General Greg Abbott's office ordered Allstate Insurance Co. on Friday to stop airing a television ad in Texas that the state contends is "false, misleading and deceptive."

The commercial, called "Totaled," tells the story of a fictional family that the narrator says was forced to give up its home because the family's auto insurance was not adequate to cover damages stemming from an accident. The ad shows the family moving out of its home and driving away.

The attorney general said the premise of the ad is false because the Texas Constitution prohibits the forced sale of a person's homestead except in narrow circumstances – preventing the type of situation portrayed in the Allstate commercial.

In a letter to company officials, the attorney general's office said the TV ad "contains false, misleading and deceptive statements and violates the Texas Deceptive Trade Practices-Consumer Protection Act and the Texas Insurance Code."

The letter also warned that the state reserves the right to investigate the ad campaign and may bring action against Allstate.

Late Friday, the insurance company said it would quit running the commercial by next week.

"The ad will not run while we work with the attorney general's office to address their concerns," said Kim Whitaker, a spokeswoman for Allstate.

"We do not believe the ad violated Texas law. Our hope is to resolve this matter quickly and continue to share information with consumers about the importance of maintaining adequate and up-to-date insurance protection."

The TV spot was brought to the attention of the attorney general by Texas Watch, a leading consumer group that has been extensively involved in insurance matters in the past.

"A Texas homeowner would never be forced to sell his home because he didn't have enough auto insurance," said Alex Winslow, executive director of Texas Watch. "Allstate should be ashamed.

"Homeowners are already being forced to pay outrageous overcharges for their insurance. They should not be scared and deceived into paying even more."

Mr. Winslow estimated that homeowners and drivers were overcharged nearly $4 billion by insurers last year, including more than $850 million by Allstate.

Texas Watch also has asked the Texas Department of Insurance to investigate the commercials to determine if any action is warranted by the state agency, which regulates Allstate and other companies.

After the insurance department cited the company for overcharging customers on home insurance in 2003, Allstate Texas Lloyds agreed to cut its rates 10.1 percent that year and an additional 8.75 percent last year. Allstate is the second largest home insurer in the state.