Allstate Places Restrictions on Sale of New Auto Policies

In a move that will make it more difficult for customers to obtain new automobile coverage, Allstate Insurance Co. on Friday prohibited its California agents from quoting prices over the telephone or selling new policies without advance approval of the home office.

In a statement, Allstate said customers desiring to learn what an auto policy will cost them will have to come in to an agent’s office to find out. Then, if they find the price satisfactory, they will have to wait for company approval before they can secure coverage.

“Allstate is taking this action to deal with the huge increase in new applications for auto insurance in California,” Allstate spokesman Jim Dudas said.

“New applications are up 60% over last year. This increase has resulted in our writing a quantity of new business which is disproportionate to our share of the California market. We cannot afford such a high rate of growth in California, or anywhere for that matter.”

Two Allstate agents, who contacted The Times but would not give their names, said many agents attending meetings with company officials had protested the new rules as a serious blow to their ability to do business.

An aide to state Insurance Commissioner John Garamendi, Steven Miller, said the company had permission from the commissioner to take these steps on an interim basis in exchange for an agreement by Allstate not to impose more drastic restrictions on sales.

Miller said Garamendi believes that some other companies are not honoring the “take-all-comers” provision of Proposition 103, thus driving Allstate sales up. Garamendi is investigating to see what he can do to ensure that all companies will make equal sales efforts, Miller said.