Allstate Pulls 'Misleading' TV Ads

Brandi Grissom
Austin Bureau

AUSTIN -- Allstate Insurance Co. is pulling the plug on a commercial the Texas attorney general's office called "false, misleading and deceptive."

In a "cease and desist" letter sent by the attorney general's office Thursday, James Wenzel, chief of the insurance practices section, asked Edward Liddy, Allstate president, to immediately halt the ad campaign.

Kim Whitaker, Allstate spokeswoman, said the company heard the attorney general's concerns and decided to pull the commercial before it received the letter.

"We are respectful of the attorney general's position, so we definitely want to make sure we are working with them to do the right thing," Whitaker said.

The commercial, which aired nationwide, showed a fictional couple, "Kate and Howard," who were sued after a car accident. Their liability auto coverage didn't pay for all the damages ordered by the court, and the advertisement said the couple were forced to sell their home.

The Texas Constitution prohibits the forced sale of a homestead except under specific conditions, none of which appear in the commercial.

The attorney general's letter said the ad violated Texas' deceptive trade practice laws and the insurance code, because it contained false and misleading statements.

Alex Winslow, executive director of consumer advocate group Texas Watch, brought the advertisement to the attorney general's attention in a letter Tuesday.

He called the commercial a scare tactic to get homeowners to buy more auto insurance, which he said is already overpriced.

He applauded the actions of Allstate and the attorney general's office on Friday.

"I certainly hope this sent a message to all insurance companies that if you try to deceive policyholders in Texas, you will be held accountable for it," Winslow said.

El Paso Allstate customer Mary Kaapke, 75, who lives on the East Side, said she hoped the commercial didn't persuade many people to buy additional auto insurance thinking they could lose their homes.

"I think most people don't pay that much attention to commercials," she said. "They either switch channels or mentally tune them out."

Whitaker said Allstate is considering modifications to the commercial that will make it more acceptable to the attorney general while still encouraging consumers to evaluate their levels of auto insurance coverage.

Brandi Grissom may be reached at bgrissom@elpasotimes.com ; (512) 479-6606.

El Paso Times Business

We can make the worm turn!!!