Allstate will refund almost $37 million for new and renewal policies written between Dec. 1, 2004-April 23, 2006, a period when the state said its rates were too high.
Allstate also will reduce homeowners rates for Allstate Texas Lloyd's customers by 3 percent statewide for new and renewal policies written for one year beginning June 2. And it will credit or refund policy holders 3 percent between Aug. 20, 2007 and June 1.
The company agreed not to increase homeowner premiums from June 2 to June 1, 2009, barring extraordinary circumstances.
The Texas Department of Insurance estimates as many as 700,000 policy holders will be affected by the settlement. Allstate is Texas' second-largest writer of homeowner policies and covers nearly 15 percent of the market.
Former policyholders eligible for refunds will receive checks from Allstate. Current eligible policyholders will receive refunds through policies or company checks. All refunds are to be credited no later than Nov. 1.
"This agreement with the Texas Department of Insurance helps create clarity and consistency in how we work together," said Rich Crist, Allstate's Texas Field vice president. Crist said he hoped the settlement led to a more competitive marketplace.
Allstate said the settlement agreement doesn't include policies issued by Allstate Fire and Casualty Insurance Co.