Allstate to pay $600K in false advertising lawsuit

District attorneys in three California counties, including San Diego, announced this week that they had reached a $600,000 settlement in a lawsuit against Allstate Insurance Co. that accused the company of false advertising.

The prosecuting agencies contended in the lawsuit, filed in Riverside County, that the Illinois-based auto insurance company failed to disclose that the ”accident forgiveness” benefit it advertised on television was not available to consumers in California.

Allstate launched a nationwide advertising campaign featuring the benefit in 2012, including some ads that were targeted toward Spanish-speaking communities, according to the San Diego County District Attorney’s Office.

The ads reached an estimated 90 percent of California households.

After voters approved Proposition 103 in 1988, the state Department of Insurance prohibited companies from offering accident forgiveness in auto insurance policies here.

Although Allstate’s ads included a small disclaimer at the bottom of the screen, the district attorneys argued that those disclaimers were “insufficient.”

California law requires all advertising to “clearly and conspicuously disclose any material facts that viewers need to avoid being misled,” according to a news release from District Attorney Bonnie Dumanis’ office.

Riverside Superior Court Judge Daniel Ottolia signed the judgment on Tuesday.

Allstate agreed to the terms of the judgment without admitting liability. The company agreed to pay $600,000, including $75,000 in investigative costs and $525,000 in civil penalties.

San Diego County will receive a third — $200,000 — of those costs and penalties.

Allstate and its lawyers worked cooperatively with the prosecutors to resolve this case and to implement new advertising practices, the district attorneys said in the news release.

dana.littlefield@sduniontribune.com

Twitter: @danalittlefield