Can you imagine Allstate Insurance Company running an advertisement explaining that it tries to deduct labor costs as depreciable items when you make a homeowners claim? Allstate runs television ads trying to warn against “cheap” insurance but fails to disclose that it instructs its claims adjusters to cheapen its insurance product when it comes to paying its customers’ insurance claims.
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As I was walking to catch a train here in Chicago the other day, I saw numerous billboard advertisements throughout the station for Allstate insurance. Each advertisement posed an insurance question and told the reader to ask an Allstate insurance agent, thus suggesting the agent would know the answer.
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Whether labor can be depreciated in arriving at an actual cash value property loss settlement has been a hot topic of debate over these past five years. A federal district court in Ohio recently weighed in on the issue in ruling on motions to dismiss two putative class action lawsuits, one against State Farm Fire & Casualty Company1 and one against Allstate Indemnity Company.2
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On November 22, 2016, Judge Berle M. Schiller from the District Court for the Eastern District of Pennsylvania issued his Opinion and Order in Payne v. Allstate Insurance Company, granting summary judgment to Allstate and awarding them $25,000 in damages, after finding that the Plaintiff made material misrepresentations while securing the homeowners policy.
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I suppose if business is really bad for some lawyers, they could just fantasize about representing people and seeking justice. If the pleadings filed by Allstate are true, one Texas lawyer went beyond fantasy and literally filed insurance claims and threatened lawsuits on behalf of policyholders he never represented. The story was reported by Texas Lawyer. It stated in part the following:


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Many bad faith cases against insurance companies allege improper or inappropriate behavior toward an insured. Sometimes, this conduct rises to the level of bad faith, and other times it does not. This week, I write about a case where a court agreed that the carrier breached the contract, but not in bad faith.


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As expected, the Texas Department of Insurance – the government regulator in charge of overseeing the insurance industry (also known as “protecting the public”) – has approved Allstate Texas Lloyd’s request to raise rates across Texas by 5.7%. The Texas Department of Insurance has the ability to deny any requested rate hike if it determines that the rate increase is excessive, discriminatory, or inadequate. Kristen Beaman, an Allstate spokesperson, said that the Texas Department of Insurance has decided to take no action on recent increases.


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