Three California counties have reached a $600,000 settlement with Allstate Insurance Company relating to advertising of its auto accident forgiveness program in California, where the program is prohibited by state law.
A civil complaint filed by district attorneys in Los Angeles, Riverside, and San Diego counties alleged false advertising and unfair competition by the Illinois-based insurance company.
Prosecutors said that Allstate launched a nationwide television ad campaign several years ago claiming its “accident forgiveness” program could protect motorists from having their insurance rates increased if they were responsible for an accident.
California consumer protection laws, however, do not allow accident forgiveness programs in California.
Under the settlement, an injunction will be filed against Allstate requiring full compliance with state law with its accident forgiveness advertising, including disclosure of the fact that such programs are not available in California.
The company admitted no wrongdoing as part of the agreement.
The $600,000 settlement will be split among the three counties.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].