Allstate may hit you with a short-rate cancellation penalty if you cancel mid-policy. Here's how to avoid it and switch to a cheaper carrier.
🚨 Two Critical Rules: 1. Get new insurance BEFORE canceling — no coverage gap, ever. 2. Time your cancellation to renewal date to avoid the short-rate penalty.
What Is the Short-Rate Penalty?
Unlike most insurers that give a pro-rata refund (refund for exact unused days), Allstate may apply a "short-rate" calculation on some policies:
Pro-rata: 6 months left on a $1,200 annual policy = $600 refund (fair)
Short-rate: 6 months left on a $1,200 annual policy = $510-540 refund (they keep 10-15% extra)
This primarily affects: Homeowners policies canceled mid-term
Auto policies: Usually pro-rata, but check your specific contract
How to avoid it: Cancel on your renewal date — no penalty when you simply don't renew
How to Cancel Allstate
Check your renewal date — try to time cancellation to coincide with it
Secure new insurance first
Call your Allstate agent or 1-800-255-7828
Say: "I want to cancel my policy effective [date]"
For homeowners insurance, you may need to provide written notice
Ask: "Will this be a pro-rata or short-rate cancellation?"
Get written confirmation of the cancellation date and refund amount
🛡️ Retention Script Rebuttal: "You're in good hands with Allstate" → "I was, but my rates have increased [X]% in [Y] years with no claims. I have a better quote."
"You'll lose your claim-free discount" → "My new carrier offers a claims-free discount too. It's an industry-standard benefit, not exclusive to Allstate."
"We can re-rate your policy" → "I already have a quote for $X. Can you match it today, in writing?" (If they can, great — you win either way.)
Allstate's Rate Increase History
Allstate has been among the most aggressive rate-hikers in the industry:
2023-2025: Average auto premium increases of 15-30% across many states
Homeowners: 20-40% increases in disaster-prone states (FL, CA, TX, LA)
Justification: Rising claims costs, inflation, natural disasters — but competitors raised rates less
Result: Allstate's rates are now 10-25% higher than GEICO, Progressive, or USAA for similar coverage in many markets
Where to Find Better Rates
The Zebra / Policygenius: Compare 50-100+ carriers in one form
USAA: Military families — consistently the cheapest and highest-rated
GEICO: Often 15-25% cheaper than Allstate for the same coverage
Erie Insurance: Excellent in the Northeast/Midwest, often overlooked
Independent agent: Can quote from multiple carriers simultaneously
State minimum vs full coverage: If your car is worth under $10K, dropping collision may make financial sense
Bundled Policies: What to Watch For
If you have both auto and home with Allstate:
Canceling one removes the multi-policy discount (10-25%) from the other
Run the numbers both ways: full switch vs partial switch
Often, switching both to a new carrier's bundle saves more than keeping one at Allstate
📊 Find All Your Insurance Premiums Upload your bank statement to JustCancel — we'll find every recurring charge including insurance payments you might be able to reduce.