Allstate Insurance is resisting an order from Louisiana’s insurance department to reinstate 4,700 homeowner policies that the company canceled in four parishes hit by Hurricane Katrina.
Louisiana Insurance Commissioner Jim Donelon said earlier this week that Allstate Co. could face fines if it fails to reinstate the policies, which were canceled after company inspectors reported that the properties had been abandoned.
Donelon said Thursday his office has received over 600 complaints from residents who said they were still living in their homes but whose policies were canceled after what the commissioner called “drive-by” inspections by Allstate.
Allstate appealed Donelon’s order to an administrative law judge on Thursday. The Northbrook, Ill.-based company questioned whether Donelon had overstepped his power and whether he had conducted an “adequate investigation.”
The judge will have the power to rule in Allstate’s favor, by striking down Donelon’s order; or uphold it and force the company to comply, meaning Allstate would have to reinstate the policies and re-inspect the properties again.
No hearing date has been set.
Donelon said the appeal was expected.
“I’m not surprised, I’m not offended,” he said.
Donelon sent a team of his workers last weekend to visually inspect some of the homes in New Orleans that Allstate considered abandoned. He said many of the homes were clearly inhabited and well taken care of.
The 4,700 cancellations involved properties in Jefferson, Orleans, Plaquemines and St. Bernard Parishes.