Allstate plans to drop most earthquake coverage

PORTLAND — Allstate Insurance Co. says it is dropping earthquake insurance to most of its 407,000 quake customers nationwide as a part of a larger move to reduce exposure to catastrophic losses.

Allstate spokesman Mike Siemienas in Chicago said four states require the company to offer earthquake coverage, but the company is in various stages of talks with regulators there.

He said the states are Kentucky, Connecticut, Rhode Island and Florida.

Allstate regional spokeswoman Caitlin Gorand, in Bothell, Wash., said the company has not written new earthquake insurance since March 6 and announced Friday that existing earthquake policies will not be renewed.

Siemienas said the company has declined storm renewals in some parts of Florida and New York and has taken a hard look at coastal coverage from Texas to Florida beginning with Hurricane Andrew in 1995.

He said the company recently purchased $2 billion in reinsurance to help cover future losses from named storms, earthquakes and fires-after-earthquakes.

Allstate lost $1.55 billion in the third quarter last year largely because of Hurricane Katrina, its largest quarterly loss since it was publicly traded.

John Piper, spokesman for the insurance division of Oregon Business and Consumer Services, said his office has checked with other major companies and found none that said they plan to take similar action.