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Insurance Bundling

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LITTLE ROCK -

Many of you probably choose to bundle your insurance coverage in order to get a multi-policy discount.

But what if the choice became a mandate?

The Arkansas Insurance Department has been getting quite a few calls lately about a practice known as forced-bundling.

According to the Arkansas Insurance Department, the practice of forced bundling is both legal and growing in Arkansas.

So are the number of complaints about it.

We asked the Insurance Department for all of the complaints about forced bundling.

Forced bundling typically involves an insurance company dropping your homeowners policy if you don't agree to also insure your vehicles with them.

Rebecca in Beebe complains "I think it is un-American that an insurance company can have this much power.  I should be able to keep my homeowner's policy and buy my car insurance where ever I want to."   Rebecca has her insurance with Farm Bureau.

Ben from Beebe writes "They (Farm Bureau) are attempting to get me to let them write my auto insurance at a higher price than I am paying now. This is a rip off for the consumer and is totally contrary to our American way of free enterprise and competition."

All of the consumer complaints or inquiries involve either Allstate or Farm Bureau.

Like this one from a nephew of 81 year-old Mary in Harrison: "Allstate refused to renew her homeowner's insurance until she moved her auto insurance to Allstate. They then quoted a price for the auto insurance 3 times as high as she is now paying."

In a letter to the insurance department, Allstate explains that "Non-renewing policies is a difficult decision, but it is necessary for Allstate to remain financially strong for Arkansas customers."

Farm Bureau says that because of losses in recent years "…we have been forced to take action that would both help reduce our overall homeowner's exposure and/or diversify our overall book of business."

Maryland is one state that has looked at outlawing forced bundling. There is no such effort in Arkansas.

We've seen it in states like North Carolina, South Carolina and Arkansas where tornados and hurricanes have hit homes hard in recent years. 

Auto insurance is a bigger money maker, so some companies don't want the risk of one without the profit of the other.

Air date:  March 18th, 2013