Monday, December 13, 2004

How Governments Can Help

I will never be a pure libertarian. Smaller government, sure. Maybe smarter government instead of less government though. Too often corporate powers need to be checked by a strong counter-balance. The latest for me is a run in with Allstate Insurance.

I have been an Allstate customer for over a decade (gosh, its a lot longer than that... but I'd date myself). I have a lot of policies with them -- home, auto, etc. And I have never had a claim. So I am part of their profit portfolio.

One of the policies I have with Allstate covers my vacation home -- a 1200 foot dwelling in the Sierra foothills. Its just a little get away for the family in the summer and a base camp for ski trips in the winter.

Last year there was a brush fire down the road from my house. Within a few months I received a letter from Allstate cancelling my policy. The reason stated was that they were "unable to locate the insured property." Now, this is not off in the boondocks. My street address is a major state highway. There are four houses other than mine on the same driveway off of the highway.

So I just assumed the inspector was incompetent and called my agent to arrange an inspection. I gave them directions to one of my neighbor's houses, who had agreed to be present when the inspector came (he lives there year round). The inspector came, filed his report and I got a call from my agent. Apparently Allstate's policy was to require 100 feet of brush clearance around dwellings. Still no policy.

Now the county requires 30 feet, the same as the mandatory setback from a property line. If my house had been built closer to the property line, I would not have been able to comply with this requirement. Fortunately, however, I had the space and more brush clearance is always a good idea in the foothills. So I agreed to pay to have this work down, Allstate inspected, and my policy was reinstated.

1 Year Later

This year I received a cancellation notice from Allstate again. The reason stated? They claimed again that they could not find the property. Twice seemed a little much for incompetence, especially since they had found the house and inspected in order to inform me of the need for additional clearance and to confirm that the clearance had been done. But I called my agent again and made arrangements for a new inspection.

Imagine my surprise when the inspection report came back stating that I had only 50 feet of clearance and that 200 feet are required. This time I decided to fight.

First I tried to work through my Allstate office. How could this inspector have gotten this so wrong? Don't you have the report from last year showing 100 feet of clearance? And why has the minimum clearance changed? I pointed out to my agent that I was beginning to feel like Allstate just didn't want to insure my building.

Around and around in circles I went with Allstate and finally got the cut and dry answer -- there is nothing we can do for you unless you clear 200 feet around your structure.

So I complained to the California State Insurance Office.

Guess what? Allstate now informs me that it was "all just a big mistake." And my policy has been reinstated. The investigator from Allstate informs me that the drawings the inspector made were misinterpreted and that they agree that there is 100 feet of clearance around the house. And she tells me that the information that I needed 200 feet of clearance "was just wrong."

I would not have gotten this issue resolved had it not been for a government office standing as an ally of the consumer. Too often large powerful entities take advantage of their size to mistreat small entities - smaller businesses or individuals. Government should be a resource to help counterbalance these interactions and put the smaller entity on a more equal footing. For that, I am happy to be sending my tax dollars to Washington and Sacramento.

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