Allstate Insurance Company has agreed to pay $600,000 to settle accusations that it falsely advertised an accident forgiveness program in California that is illegal in the state.
The lawsuit was brought by the district attorneys of Los Angeles, San Diego and Riverside. They alleged that Allstate ran car insurance ads in California in which the company advertised an accident forgiveness program. However, the ads didn’t reveal that the program wasn’t available in the state.
Allstate launched the campaign nationwide in 2012. Its accident forgiveness program protects drivers from rate increases when they have an accident. But such programs are illegal in California, and the state claimed that Allstate’s disclosure of this fact — a fine-print disclaimer only briefly shown at the bottom of the screen — was insufficient. The ads reached 90% of the households in California, the district attorneys claimed.
Allstate said in a statement that it doesn’t agree with the state’s position, but has agreed to alter the advertisements.
“Although Allstate does not agree with the allegations, we have reached an agreement with the DA on future advertising to address the concerns raised,” the insurer said.
According to court documents, Allstate has also agreed to submit to an injunction that bars the company to make any misleading claims about its accident forgiveness program and from failing to disclose that the program isn’t available in every state.
