Allstate Receives Approval of New Product to Help Texas Homeowners Better Manage Insurance Needs

Dec 21, 2001, 00:00 ET from Allstate Corporation

    IRVING, Texas, Dec. 21 /PRNewswire/ -- The Allstate Corporation
 (NYSE:   ALL) announced today that its Texas homeowners insurance subsidiary,
 Allstate Texas Lloyd's, received Texas Department of Insurance approval on
 endorsements that provide broader coverage to the homeowners HO-A insurance
 policy.  This will create a new product option called the "Allstate
 HO-A-Plus." It will give Texas homeowners customers a viable insurance product
 with coverage in between the two policy forms previously available in Texas --
 the minimal HO-A policy and the more comprehensive HO-B.
     Allstate anticipates the HO-A-Plus will cost an average of 20 percent less
 than the current Allstate HO-B policy available today.  This can help Texas
 homeowners better manage their insurance costs while meeting their insurance
 needs.  The Allstate HO-A-Plus will be the primary product offered by Allstate
 to Texas homeowners customers beginning in 2002.  Allstate anticipates
 offering the HO-A-Plus to new customers in late January and to current
 Allstate HO-B customers at renewal beginning in March.
     "This is good news for Allstate policyholders in Texas," said Gary Briggs,
 Allstate Field Vice President.  "We applaud Commissioner Montemayor for
 allowing Allstate to offer Texans a new choice for homeowners insurance
     The Allstate HO-A-Plus will provide a viable product option to the Texas
 homeowners insurance marketplace.  Specifically, the Allstate HO-A-Plus
 includes additions to the existing HO-A policy:
     -- Replacement cost coverage for both personal property and the dwelling,
        subject to limitation;
     -- Protection against perils such as sudden and accidental discharge,
        leakage, or overflow of water or steam from within plumbing, heating,
        air conditioning systems or household appliances;
     -- Protection against freezing of plumbing, heating, air conditioning
        systems or household appliances;
     -- Protection against  building collapse; building glass breakage; falling
     -- Limits are specified for remediation of mold resulting from a covered
        water loss ($5,000);
     -- Coverage for foundation tear out and replacement (5% of the dwelling
        limits or $3,500, whichever is greater) resulting from sudden and
        accidental discharge or leakage of water from a plumbing drain system
        in or under the slab or the foundation of the dwelling.
     "The Allstate HO-A-Plus is a result of innovation by Allstate," said
 Briggs.  "It clearly shows our desire to alleviate the Texas homeowners
 insurance crisis and create solutions that are equitable for our customers and
 for our company."
     Allstate has seen sharp increases this year in homeowners insurance claims
 for water losses and mold damage stemming from those losses.  However, other
 factors independent of mold are also driving losses in Texas and forced
 Allstate to significantly raise rates this year on its HO-B policy. The
 general cost of construction and property repair has risen substantially in
 Texas.  And the potential for property damage due to weather-related
 catastrophes such as hailstorms, tornadoes, wind, and hurricanes is greater in
 Texas than in almost any other state.
     Allstate does not plan to offer the Texas Department of Insurance's
 recently modified HO-B policy to Allstate policyholders in Texas.  Allstate's
 goal continues to be to give consumers insurance they need at an appropriate
 price.  Long term, Allstate wants to offer Texas consumers more options for
 their homeowners insurance.  Allstate is in the process of submitting for
 review to the Texas Department of Insurance the homeowners contract Allstate
 uses in most other states.  If adopted by the Commissioner, the proposed
 Allstate policy will provide consumers with another viable policy option.
     Allstate's use of the HO-A Plus in Texas is intended to help return
 Allstate's homeowners business in the state to profitability while providing
 its customers with a new choice in the insurance marketplace.  It is expected
 it may be some time before the full effect of the initiatives is apparent in
 the corporation's financial results.  The changes take time to implement, and
 claims will continue to be reported under the HO-B policies as Texas
 homeowners policies renew on an annual basis.
     This press release contains a forward-looking statement about the impact
 of the introduction of the new policy form in Texas on the financial results
 of The Allstate Corporation.  The statement is subject to the Private
 Securities Litigation Reform Act of 1995 and is based on management's
 estimates, assumptions and projections.  Management believes that the
 introduction of the new policy will help return Allstate's homeowners
 insurance business to profitability in Texas.  However, losses could continue
 at current rates or increase due to a variety of factors, including
 weather-related catastrophes such as hailstorms, tornadoes, wind, and
 hurricanes.  In addition, the return to profitability will be mitigated to the
 extent that Allstate continues to face water losses, and mold damage stemming
 from those losses, on current HO-B policies that remain in force.
     The Allstate Corporation (NYSE:   ALL) is the nation's largest publicly held
 personal lines insurer. Widely known through the "You're In Good Hands With
 Allstate(R)" slogan, Allstate provides insurance products to more than 14
 million households and has approximately 13,000 exclusive agents in the U.S.
 and Canada.  Customers can access Allstate products and services through
 Allstate agents, or in select states at and 1-800-Allstate(SM).
 Encompass(SM) and Deerbrook(SM) Insurance brand property and casualty products
 are sold exclusively through independent agents.
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