National General Insurance Company, an Allstate subsidiary, is the defendant in several active lawsuits, including a California class action alleging it uses a deceptive online application to rescind auto policies after claims, a U.S. Department of Justice civil case alleging it force-placed unneeded insurance on up to two million financed vehicles, and a New York Attorney General suit over data breaches that exposed driver’s license numbers for roughly 165,000 state residents. A Wisconsin jury has also found the company acted in bad faith in a claims denial, and state regulators have cited the insurer for business practice violations. Allstate acquired National General Holdings Corp. for about $4 billion in January 2021, and most of the challenged conduct predates that deal.
California Class Action Over Rescinded Auto Policies
The California case, Emily Cobos et al. v. National General Insurance Company et al., began in San Bernardino County Superior Court and includes 79 causes of action, including insurance bad faith, unfair business practices, and breach of contract.1FindLaw. Emily Cobos et al. v. National General Insurance Company et al.
At the center of the complaint is the online application. It asks users to list “drivers of your vehicle” but, according to the plaintiffs and reporting by NBC stations in Los Angeles and San Diego, does not separately prompt applicants to name every household member over 14. A later screen asks applicants to confirm all such household members have been disclosed, with the answer pre-marked “yes.” Selecting “no” allegedly stops the application rather than letting the user add names.2NBC San Diego. Lawsuit Accuses National General Auto Insurer of Unfairly Denying Claims Plaintiffs allege the company then uses that disclosure gap to rescind policies and deny claims after accidents, especially when the payout would exceed premiums collected.1FindLaw. Emily Cobos et al. v. National General Insurance Company et al.
NBC profiled several affected policyholders. Jennifer Darconte totaled her 2011 GMC Yukon in Corona, California, and had her claim denied and policy canceled because she had not disclosed her 14-year-old son, who was not a driver. She said the roughly $10,000 loss left her family unable to replace the vehicle.3NBC Los Angeles. Southern California Residents Say Car Insurance Company Is Unfairly Denying Claims Andy Nguyen had a $12,000 claim denied and his policy rescinded after an adjuster asked about relatives in the home. Sergio Preciado lost coverage after failing to disclose his 20-year-old son, who had no driver’s license and was not in the crash. In both cases, premiums were refunded but accident damages were not covered.2NBC San Diego. Lawsuit Accuses National General Auto Insurer of Unfairly Denying Claims
Insurance broker Marisol Alvarez, serving as an expert witness, testified that the “14-year-old household-member clause” is unusual in an industry that typically rates coverage by drivers and vehicles. A National General director of product management acknowledged in deposition that the application pre-marks the household-disclosure answer as “yes,” and a claims adjuster testified that staff are trained to ask about household members during claims processing to identify grounds for rescission.2NBC San Diego. Lawsuit Accuses National General Auto Insurer of Unfairly Denying Claims National General and Allstate have denied the allegations in court filings.3NBC Los Angeles. Southern California Residents Say Car Insurance Company Is Unfairly Denying Claims
The trial court initially denied class certification on manageability grounds. On July 1, 2025, the California Court of Appeal, Fourth District, reversed. It held that individual damages do not block class certification when common liability questions predominate, and that plaintiffs may limit the damages they seek in a class proceeding. The appellate court sent the case back with instructions to certify at least a liability-only class and to consider subclasses, and it rejected the defendants’ cross-appeal.1FindLaw. Emily Cobos et al. v. National General Insurance Company et al. The case is proceeding in the trial court.4Midpage. Cobos v. National General Insurance
DOJ Civil Case Over Force-Placed Auto Insurance
In July 2024, the Department of Justice sued National General Holdings Corp. under the Financial Institutions Reform, Recovery and Enforcement Act in the Western District of Pennsylvania. The government alleges that from roughly 2005 to 2016, National General pushed collateral protection insurance onto vehicles financed through Wells Fargo even when borrowers already carried valid coverage.5Insurance Journal. DOJ Files Civil Complaint Against National General Holdings
The complaint describes the insurance-tracking system as “wholly ineffective.” The DOJ says National General sent verification letters to undeliverable addresses and skipped required phone calls to confirm outside coverage. False placements occurred at a rate of 56 to 93 percent, according to the government, on up to two million vehicles, affecting between 640,000 and 1.4 million borrowers. Each paid about $1,100 a year on average for coverage they did not need, and National General took in more than $500 million in premiums during the period.5Insurance Journal. DOJ Files Civil Complaint Against National General Holdings Borrowers also faced late fees, negative credit reporting, and, in some cases, improper repossessions.6Repairer Driven News. U.S. Lawsuit Filed Against National General for Forcing CPI on Vehicles
National General ended the product after Wells Fargo gave notice in September 2016 that it would terminate the arrangement. The company has stated that the allegations are false.5Insurance Journal. DOJ Files Civil Complaint Against National General Holdings In April 2025, a federal judge denied the insurers’ motion to dismiss, finding the government had met pleading standards, so the case moves forward.7Law360. Auto Insurers Can’t Shake Feds’ Forced Coverage Claims
Related Private Settlement
A separate private class action by borrowers against Wells Fargo and National General over the same forced-placement practices settled in 2019. Under In re Wells Fargo Collateral Protection Insurance Litigation, Wells Fargo paid at least $385 million to the class and National General added $7.5 million to a supplemental fund for borrowers not covered under the main allocation. Wells Fargo also agreed to use reasonable efforts to correct adverse credit reporting.8Class Law Group. Wells Fargo Auto Class Action Lawsuit Settlement Agreement Total distributions came to at least $393.5 million.9PR Newswire. Court to Notify Wells Fargo Auto Loan Customers About a Class Action Settlement Related to Insurance Charges That settlement does not resolve the DOJ’s separate FIRREA case, which remains active.
New York Attorney General Data Breach Suit
On March 10, 2025, New York Attorney General Letitia James sued National General Holdings Corp. and Allstate Insurance Company over two data breaches in 2020 and 2021 that exposed driver’s license numbers for more than 165,000 New Yorkers.10New York Attorney General. Attorney General James Sues National General and Allstate Insurance
According to the complaint, National General’s online auto quoting tools displayed full driver’s license numbers in plain text, a design flaw that attackers exploited with automated bots. The first breach, in 2020, affected roughly 12,000 consumers, including more than 9,100 New Yorkers. The Attorney General alleges the company did not detect the intrusion for two months and never notified affected consumers or state agencies. A second breach in February 2021 compromised about 187,000 additional consumers, including roughly 155,000 New Yorkers.10New York Attorney General. Attorney General James Sues National General and Allstate Insurance The complaint describes the stolen driver’s license numbers as “nearly permanent” identifiers that can enable identity theft and fraudulent benefit claims.11New York Attorney General. State of New York v. National General Holdings Corp. et al., Complaint
The suit accuses the defendants of lacking reasonable administrative and technical safeguards, including weak password controls, no multi-factor authentication, and no automated attack detection. It also alleges misrepresentations to consumers about data security and violations of the New York SHIELD Act, the Department of Financial Services Cybersecurity Regulation, and the state breach-notification law. The Attorney General is seeking civil penalties, an injunction, restitution for affected consumers, and disgorgement of profits.11New York Attorney General. State of New York v. National General Holdings Corp. et al., Complaint
The defendants removed the case to federal court in April 2025. In October 2025, U.S. District Judge Lewis Kaplan granted the Attorney General’s remand motion, sending the case back to the New York Supreme Court in Manhattan, where it remains pending.12CourtListener. The People of the State of New York v. National General Holdings Corp.
Wisconsin Bad Faith Verdict
In a separate case, a Wisconsin jury found National General acted in bad faith when it cut off massage therapy benefits for Michael A. Hughes, who had a spinal cord injury. The Wisconsin Court of Appeals affirmed liability in September 2024.
The evidence showed the company stopped payments in May 2017 based on an independent medical examination by an orthopedic surgeon rather than a physical medicine and rehabilitation specialist. National General did not give the examining doctor complete medical records and disregarded the prescribing physician’s justification for the therapy. The assigned adjuster was on a performance improvement plan and, by a supervisor’s testimony, had fabricated “red flags” to support the denial. Payment resumed five months later after a second examination confirmed the treatment was medically necessary.13FindLaw. Hughes v. National General Insurance Company
The jury awarded $100,000 in compensatory damages and $1 million in punitive damages. The appellate court upheld the compensatory award and $264,870.29 in attorney fees, and sent the punitive damages back for reduction under Wisconsin’s statutory cap. The reduced figure came to $729,740.58.14Wisconsin Law Journal. Insurance Bad Faith Appeals and Appellate Jurisdiction Attorney Fees
State Regulatory Findings
State regulators have also cited the insurer. A Virginia Bureau of Insurance market conduct examination covering April 2016 through March 2017 found violations across rating, underwriting, policy termination, and claims handling at Integon Casualty, Integon National, and National General Insurance Company. Examiners identified $27,209.74 in claims underpayments. The report concluded that certain violations, including concealment of benefits and misrepresentation of policy facts, happened often enough to constitute a “general business practice” subject to monetary penalties.15Virginia State Corporation Commission. Market Conduct Examination Report, Integon Casualty, Integon National, and National General Insurance Company
Where Allstate Fits In
Allstate’s $4 billion acquisition of National General Holdings Corp. closed on January 4, 2021.16Allstate Corporation. 2022 Fourth Quarter AIC Management Discussion and Analysis National General operates through a group of subsidiaries, many domiciled in North Carolina, including Integon National Insurance Company, Integon Casualty Insurance Company, New South Insurance Company, and National General Insurance Company itself. Allstate Insurance Holdings, LLC sits above the National General corporate structure.17North Carolina Department of Insurance. National General Insurance Group North Carolina 2022 Report of Examination The Integon entities named as co-defendants in several of these cases are part of the same National General operation now under Allstate.
The New York Attorney General alleges the data security failures continued after Allstate took over National General’s operations, and the DOJ’s FIRREA complaint names Allstate Insurance Holdings, LLC alongside the National General entities. Whether Allstate carries direct legal liability for conduct that largely predates the acquisition is a contested question across the pending proceedings.