Claims News Service, Oct. 12, 11:42 a.m. EDT — The Texas Department of Insurance and the State of Texas has been granted a temporary restraining order against Allstate Insurance Company, Allstate Indemnity Company, and Allstate Texas Lloyds. The order prohibits Allstate from denying additional living expenses for policyholders who have lost the use of their home, regardless of whether direct physical loss or physical damage to the residence premise occurred.

The Department uncovered a pattern of denials by Allstate after receiving numerous complaints by policyholders affected by Hurricane Rita. Thousands of Texas residents continue to be unable to use their homes due to a lack of utilities in the storm-damaged area.

The Department was informed that, in many cases, Allstate was not paying claims for "Loss of Use" coverage unless there was physical damage to the property. The Department maintains that an insured dwelling does not have to be physically damaged to result in coverage under the policy and that loss of use of that property satisfies the criteria for additional living expenses claims.