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Allstate Insurance Co. announced this week it would stop selling the Your Choice Auto policies.Effective January 1, Allstate customers in California will be phased into standard policies.
The policies offered an "accident forgiveness" feature that television advertisements touted would result in motorists not getting their rates automatically increased after an accident or a traffic ticket.
Santa Monica-based Consumer Watchdog, founded by Prop 103 author Harvey Rosenfield, charged that Allstate's policy violated Proposition 103, an initiative approved by voters in 1988.
"We were saying that it's deceptive and unfair" by charging customers 15% higher than normal premiums with the promise that some future accidents and traffic tickets would not be used as the basis for hiking rates, said Douglas Heller, Consumer Watchdog's executive director told the Los Angeles Times.
In early 2010, then California Insurance Commissioner Steve Poizner issued a notice of hearing, set for Dec. 4, 2010. Ultimately, Allstate decided instead of going through the formal hearing to withdraw the program. Before he left office, Poizner approved the agreement to remove YCA from the California market.