Allstate and the Louisiana Department of Insurance announced an agreement today that settles customer complaints over wind and hail coverage and the company's re-inspection of homes.

The Northbrook, Ill.-based carrier said it will be contacting customers about reinstating wind and hail coverage that was removed when insureds switched companies in the state. It will also pay the department $250,000 to avoid expenses associated with a hearing on its re-inspection of homes back in 2006, following Hurricane Katrina.

The re-inspection program dates back to when Allstate and other companies inspected homes to determine if customers were still living in them, and making repairs after Hurricane Katrina. Hundreds of customers complained to the department at the time that the company was either cancelling or non-renewing their policies because Allstate inspectors determined no one was living at the address.

The uproar led to the company contacting cancelled customers and re-inspecting the homes.

An Allstate spokeswoman, Kate Hollcraft, said the resolution of the inspection program was mutually beneficial to all parties involved.

The Department of Insurance called the payment a fine and Allstate's actions affected 4,700 homeowners in Jefferson, Orleans, St. Bernard and Plaquemines parishes. Of the 588 who filed written complaints several hundred were reinstated, the department said.

On the issue of wind and hail coverage, Mike Siemienas, a company spokesman, said a few hundred customers lost coverage for wind and hail when they switched from one Allstate company to another that did not write it.

The Louisiana Department of Insurance said the switch was from Allstate Insurance to Allstate Indemnity and from Encompass Insurance to Encompass Indemnity.

Mr. Siemienas said the state has a three-year rule that a customer's coverage cannot be cancelled except for commission of fraud or non-payment.

The agreement allows customers who have been continuous Allstate insureds for three years or more to again be offered wind and hail coverage. He said the company will be working to contact all the affected customers and inform them of the availability of the coverage, he said.

The department said customers who were with any of the four companies for three or more years will be offered an opportunity to have their policies reinstated with full wind and hail coverage.

"This settlement allows us to focus on what is most important--our customers," said Mr. Siemienas.

"We are pleased to work together with the commissioner and the department to resolve this situation. This agreement is the result of our desire to find a solution that meets the needs of the customers and the agents who serve them," said Ron Corbin, field vice president for Allstate, in a statement.

"We are confident that we properly implemented the re-inspection program," he added. "However, we decided it was in the best interest of all parties involved to reach an amicable resolution."

Commissioner of Insurance Jim Donelon said the company would be contacting their agents about the reinstatement process, but he urged policyholders to contact their agent for reinstatement as soon as possible.