July 10, 2008 / 6:25 PM / 11 years ago

California orders Allstate to cut homeowner rates

HAMILTON, Bermuda, July 10 (Reuters) - U.S. insurer Allstate Corp (ALL.N) will have to lower their rates on California homeowner policies by 28.5 percent making an estimated $255 million in annual savings for consumers, the state’s insurance commissioner said on Thursday.

“In today’s sputtering economic environment, people need all the help they can get just to pay the bills,” Insurance Commissioner Steve Poizner said in a statement.

Allstate spokesman Peter DeMarco, in a statement, said the company was “disappointed” in the order but planned to comply.

Northbrook, Illinois-based Allstate had initially filed for a 9.3 percent increase in homeowners insurance rates, according to Poizner’s statement.

He ordered the rate reduction after an administrative judge recommended the cut. Consumers will save an average of $242 per policy on an annual basis, according to the statement.

The rate order follows one earlier this year, forcing Allstate to cut its auto policy rates in California by 15.9 percent.

Allstate is the largest publicly traded U.S. insurer of homes and autos.

Reporting by Lilla Zuill, editing by Richard Chang lilla.zuill@reuters.com;+1 646 223 6281

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