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Consumers Want Allstate Records Kept Public

Insurer Asks Court to Seal Documents in Katrina Lawsuit

August 6, 2007 

The groups want to ensure that Allstate cannot seal court records that reveal the claims practices and policies it used to leave homeowners empty-handed after Hurricane Katrina.

Representing Foundation for Taxpayer and Consumer Rights (FTCR), a consumer watchdog group, Public Justice, a national public interest law firm headquartered in Washington D.C., today filed an opposition to Allstate's motion to "seal" the trial exhibits in Weiss v. Allstate, the case of a New Orleans couple who earlier this year won a $2.8 million verdict against Allstate for illegally refusing a hurricane-related claim. The parties subsequently settled; the terms are confidential.

The insurance company has asked the court to either return or seal the trial exhibits. Those documents include Allstate's manual for handling claims and an operational guide for subcontractors engaged to work on Katrina-related damage.

Opposing Allstate's request, FTCR says the trial exhibits "provide insight into Allstate's decision-making process" and that denying public access to them "would directly impede FCTR's mission of educating the public about insurance practices and abuses."

FTCR, which has fought for comprehensive insurance reforms in California and nationwide, says Allstate and other insurance companies have accepted premium payments from customers like the Weisses for years, only to deny or drastically reduce property owners' claims when catastrophe strikes.

"It appears that Allstate devised its claims-handling process to avoid paying claims to homeowners and did so at the very same time homeowners were, quite literally, stranded and desperate due to the devastation caused by Hurricane Katrina," said Michael Lucas, a Public Justice attorney.

"These records shed light on Allstate's behavior after Hurricane Katrina and Allstate is afraid of the public scrutiny," Lucas said.

"Allstate doesn't want anyone to know the internal procedures by which it delays and denies the claims of Katrina survivors and other policyholders in the wake of a disaster," said FTCR's Harvey Rosenfield, author of California's insurance reform initiative, Proposition 103.

"These documents may embarrass Allstate, but that's no reason to keep them secret. The law says they must remain public."

Last month, the Consumer Federation of America criticized AllState Insurance, accusing the carrier of unjustifiably raising home and automobile insurance rates relative to the amount paid out in claims, using questionable practices to settle claims, and attempting to shift costs to taxpayers.

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