Allstate Insurance Company has announced that it will send refunds or credit the accounts of nearly 700,000 of its current and former Texas homeowner insurance customers. The insurer is also reducing rates for many of its Texas homeowner insurance customers by an average of 3% statewide.

The rate reduction and refund make up the core of an agreement between Allstate Texas Lloyd’s, the Texas Department of Insurance, and the Office of Public Insurance Counsel.

Nearly all customers who currently have an Allstate Texas Lloyd’s homeowner policy will be eligible. Allstate Texas Lloyd’s, an affiliate of Allstate Insurance Company, currently accounts for approximately 87% of Allstate’s total homeowner insurance customers in Texas.

The refunds and credits, which will be completed by the end of October 2008, will vary based on each policy’s premium and tenure, averaging about $80 per customer.

The agreement is the result of discussions between Allstate and the Texas Department of Insurance as the two parties sought common ground to end a series of ongoing disagreements stemming from Allstate Texas Lloyd’s homeowners rate filings in 2004 and 2007.

Rich Crist, Allstate’s Texas field vice president, said: This agreement takes Allstate and the Texas Department of Insurance out of the courthouse, ending burdensome, costly litigation in a positive way for our customers.