Allstate Lifts Its Ban on Issuing Quake Insurance

A day after it stopped issuing earthquake policies to its California customers, Allstate Insurance Co. lifted its statewide ban and began offering coverage to all of its policyholders, including those in the 17 counties affected by Tuesday’s major earthquake in the Bay Area.

Allstate, the only company to put a blanket moratorium throughout the state, became the first major carrier to remove that ban in the quake-affected areas. Under state law, the other two major carriers--State Farm and Farmers--invoked 30-day moratoriums in the Bay Area counties.

State Farm, Farmers and insurers writing far fewer policies--including Transamerica Insurance Co. and California Casualty--said they were continuing their moratoriums.

“We took a very cautious approach yesterday,” Richard Donegan, an Allstate underwriting manager in Los Angeles, said about Wednesday’s moratorium. “But we made a decision today (Thursday) that we didn’t have to go statewide and that in the affected area, we could still offer coverage to those people whose property hasn’t been damaged and still protect the company” from possible fraud by homeowners.

Donegan said the only additional requirement on agents writing policies in the earthquake damaged area is that they must inspect the property to make sure there is no pre-existing damage.

“We just implemented our moratorium,” said State Farm spokesman Jerry Parsons, “and we have no plans to change that.”