Allstate Halts HO Writing in Alaska

By Mark E. Ruquet

NU Online News Service, Aug. 20, 12:30 p.m.EDT?Allstate Insurance Co. is not writing new homeownersinsurance policies in Alaska until it irons out a dispute with thestate's insurance department over the issue of mold.

A spokesperson for the Northbrook, Ill.-based company said thatsince Aug. 6 Allstate has stopped writing any new homeownersbusiness while it works with the Alaska Division of Insurance toget approval for an endorsement on homeowners policies coveringmold.

Scott Richardson, Allstate's Northwest region field corporaterelations manager based in Bothell, Wash., said Allstate has beenworking with the department for the last 18 months to get approvalof the endorsement. He said the company is seeking the endorsementto limit its exposure to suits stemming from mold claims.

Mold claims are not an issue in Alaska, Mr. Richardson said. Butthe carrier wants to protect itself from the type of onslaught ofsuits that has arisen in some states by having the endorsement.

The need for the endorsement is of added concern, he added,because Allstate has the largest share of the homeowner's insurancemarket in Alaska at 30 percent.

The moratorium only affects new business with Allstate. He saidexisting Allstate customers can still get coverage for a new home.It affects no other line of insurance the company sells.

Mr. Richardson said the endorsement that Allstate is seekingwould cover mold damage from a maintenance problem up to $5,000.Currently, there is no such coverage for mold damage frommaintenance issues. Mold, he said, is only covered if it forms asthe result of an accident or catastrophic event.

Of the five states he covers in his region--Alaska, Idaho,Oregon, Hawaii and Washington--Alaska is the only one without someendorsement.

Linda Hall, director of the Division of Insurance, said herdepartment is concerned that the proper consumer protections be inplace.

"All carriers are concerned with this exposure," said Ms. Hall,who has been in the post since March. "It is a nationalconcern."

On Allstate's decision to stop writing new business, Ms. Hallsaid, "I'm disappointed in anything that removes coverage or makesthe market smaller for our consumers."

Both Ms. Hall and Mr. Richardson said the two are cooperatingand remain committed to reaching an agreement. Mr. Richardson saidAllstate was optimistic that the carrier would reach an agreementsoon with the state.