When he graduated from Seton Hall in 1981, he secured his first auto insurance policy with Allstate. Twenty-nine years later, he’s still a customer. But not for long.
The insurance company dropped the 53-year-old dad of two after it said Mura didn’t return a renewal questionnaire. Mura said he filled out and returned the form to Allstate in a prompt manner.
Still, Allstate is letting him go. And it’s perfectly legal.
Here’s how it happened.
Mura, who lives in Jamesburg, started his relationship with Allstate in 1981. As his life changed, his insurer stayed the same. He added a homeowners policy, flood insurance and umbrella coverage.
‘‘I have always paid my premiums, electing the auto-pay option,’’ Mura said. ‘‘I have never had an accident or moving violation. I have always been rated in Allstate’s Tier 1, their most favorable rating.’’
The only claims, according to Mura: a tree branch that fell on two cars in his driveway, his wife was rear-ended while stopped at a red light and a driver once backed into Mura’s car when he was waiting to exit a parking lot.
On Jan. 11, he received what he called a standard policy renewal packet, along with the renewal questionnaire. On the back of the cover letter was a post-script: ‘‘P.S. Please note that there is a Renewal Questionnaire in this renewal offer mailing. The questionnaire asks you to provide information about drivers and vehicles on your policy. …Please be aware that if you do not complete and return the questionnaire, we may not renew your auto insurance policy.”
Until Mura got a call from his Allstate agent on June 8. He said Allstate was not renewing Mura’s auto policy, effective Aug. 18, 2010. The reason? The insurance company said Mura didn’t return the questionnaire.
‘‘(The agent said) there were two or three other customers with nonrenewals subsequent to the renewal questionnaire,’’ Mura said. ‘‘(The agent) further stated he didn’t know why Allstate didn’t send the renewal questionnaire ‘under separate cover’ if it carried so much importance, and so his customers kept missing it buried in the back of a standard-looking renewal packet.’’
Thinking the matter would be resolved quickly, Mura contacted Allstate directly. He thought perhaps the form had been misfiled or misplaced. But every attempt Mura made to contact Allstate — to which he pays nearly $5,400 a year for all his policies — got him nowhere.
Mura said he told the customer rep during one conversation that he mailed the questionnaire.
‘‘ ‘Do you have proof?’ she asked me. I was incredulous. I asked her if she really believed that I would have sent a standard questionnaire back to Allstate certified mail?’’ he said.
Mura filed a complaint with the New Jersey Department of Banking and Insurance and shared some more calls with Allstate. No progress made.
He then contacted Bamboozled, and started shopping for new auto insurance.
LEGAL, BUT FAIR?
The state’s banking and insurance department conducted an interesting study of Allstate nonrenewals in 2006. It found that of 68 non-renewals, 65 were in error. That’s a 96 percent error rate.
What does ‘‘error’’ mean? According to the report: ‘‘A file is counted as an error when it is mishandled or the insured is treated unfairly, even if no statute or regulation is applicable.” It also said: “There are errors cited in this report that define practices as specific acts that an insurer commits so frequently that it constitutes an improper general business practice.”
‘‘Is it so far-fetched for me to believe that my questionnaire was possibly misplaced or misfiled?’’ Mura said after reading the survey.
We contacted Allstate to see if something could be done to help this customer of 29 years.
‘‘He was not offered the option to renew because we did not receive a response to our request for customer information,’’ said spokeswoman Sheila Breeding.
She said the company sent renewal questionnaires to 9,000 of its 480,000 auto policyholders in New Jersey between September 2009 and April 2010. Breeding could not say how many of those were not renewed, either because they didn’t return the form or for other reasons. She did say the company expects to renew more than 98.5 percent of policies in the state.
Breeding said Allstate sends these forms to customers who had missing or questionable information in their record.
Renewal questionnaires are a common industry practice, and it’s perfectly legal in New Jersey for an insurer not to renew someone who does not return the completed form.
‘‘As long as an insurer provides proper notification, the law permits nonrenewal for failure to provide information needed to rate the policy,’’ said Marshall McKnight, a Division of Banking and Insurance spokesman.
Okay, legal, but is it fair? If an insured has several at-fault accidents or moving violations, rates should go up, or maybe the policy should be dropped. And in New Jersey, rates can even be raised for no-fault claims — such as if a tree falls on your car. But for a form? A form that asks for information the insurance company should already have?
Even before Mura received his, the Allstate questionnaires were not without controversy. The first batch was mailed in September 2009 to consumers with effective renewal dates of April 16 through June 9, 2010. Those resulted in complaints after some customers were nonrenewed, and customers said the language was not clear, Breeding said.
Banking and Insurance’s McKnight said the agency also received dozens of complaints, and it investigated.
Allstate rescinded nonrenewal notices for customers who received the initial letter, but for customers who received the new-and-improved letter — including Mura — nonrenewals stand.
We asked Allstate to give the insured the benefit of the doubt. Mura said he sent the form, and his past history doesn’t seem to warrant a nonrenewal. The insurance company would only say again that the nonrenewal was because it didn’t receive the form — not because of Mura’s previous no-fault claims or for any other reason. Mura said he wasn’t surprised that Allstate didn’t change its mind.
‘‘If for some reason a computer algorithm says I’m a greater risk. they have a right to say, ‘We don’t want your business.’ But don’t tell me I’m noncompliant after 29 years of customer loyalty,’’ he said.
Mura’s been insurance shopping, and he found three companies with identical policies but cheaper than his Allstate policy.
‘‘I’m going with a smaller company that says if I’m a good driver, they’re going to reward me for good driving,’’ he said, adding he’ll be investigating the new company’s rates for homeowners, flood and umbrella coverage. ‘‘Why should I keep my other policies (at Allstate)?