Allstate earlier this year discussed its new approach to homeowners insurance in Oklahoma designed to limit the insurer's costs for replacing older roofs, and after the recent rash of tornadoes in the state, that new approach is about to get its first real test among consumers, according to articles in Crain's Chicago Business.
In February, Crain's reported that Allstate CEO Thomas Wilson said in a conference call that the new homeowners product, called House & Home, would be rolled out in Oklahoma first and then nationwide. Under the new approach, Allstate would no longer cover the full cost of replacing a damaged roof that is over 10 years old, the article says.
It quotes Wilson as saying on the call, “People just don't get their roofs fixed and then a hailstorm comes and we replace a $20,000 roof when we're getting a thousand bucks from the customer and it's obviously not a good trade.”
Now, Crain's says in a follow-up article that the tornado that leveled Moore, Okla. will be the company's first true test to see how consumers react to the new coverage.
Allstate is the No. 4 home insurer in the state, with 5.5 percent, the article notes, but the number of policyholders impacted by the new coverage plan may be limited because those whose policies date to before October 2011 can still receive full roof replacement even if their roof is over 10 years old.
Still, the article quotes Consumer Federation of America's Insurance Director J. Robert Hunter as saying the tornado losses will allow Allstate to “get kind of a lab test” on consumer reaction to its new approach.
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