The state of Maryland says that insurance company Allstate must refund $17.5 million to more 20,000 auto insurance policy holders. According to the Maryland Insurance Commissioner’s office, the administration had received numerous complaints after the property and casualty insurer had sent premium increase notices to policyholders between January 2003 and March 2005 without detailing the violation or accident that each policyholder had committed which led to the premium increase. Refunds will average $850, and Allstate is being fined $100,000 for not complying with state law by sending the premiums without the required information.
A spokesperson for Allstate says that every policyholder who received the notice of a premium increase had a past violation or accident that justified the increase. They admit, however, that the specific statutory language was missing and have expressed their regret for the error.
Auto insurance laws in the State of Maryland require that all drivers must have: