Allstate has agreed to settle a lawsuit over its $3 billion home insurance policy for consumers who did not qualify for its higher premium.
The insurer, which has about 2.3 million customers, had sued the federal government in November, claiming that it was not required to offer the subsidy to consumers with more than a $3,000 deductible.
The insurer settled the suit on Thursday, according to court documents.
Allstate’s new home insurance program was created in the aftermath of the financial crisis in 2009, when the company was forced to slash its home insurance premiums after receiving criticism for offering higher premiums than competitors.
The policy is available to consumers in most states.
The lawsuit alleged that Allstate, which offers about 3.3 percent of its policy nationwide, had inflated the premium because it did not count as a catastrophic loss in its calculations.
The government had asked the court to dismiss the lawsuit and said the insurer should pay back consumers who claimed their home insurance premium was too high.