Allstate Offers New Roadside Assistance Service

Allstate Corp. (ALL) unveiled a new roadside assistance program Thursday that will allow any U.S. driver--not just its own customers--to call the company for help when they're stuck on the side of the road.

The program won't require an annual fee, unlike most popular roadside assistance programs, and drivers don't have to sign up in advance--though Allstate is hoping some do. And it's hoping the people who call for help think of the company, the second-largest home and auto insurer in the U.S., when their insurance policies come up for renewal.

Stranded motorists will pay a flat rate of $75 for a tow or $50 if they lock their keys in their car. Allstate says the average person calls on their motor club for help once every three years, and could end up saving money by using Allstate's service instead of paying annual dues to a competitor.

But the company's primary targets are the 35 million U.S. households that it says don't have a roadside assistance provider. Allstate's research shows they're typically younger drivers. And if they get stranded and call for help, Allstate will take their name, dispatch a tow-truck, and hope their new customers remember which company helped them out of a jam.

While its closest competitors, Geico Corp. and Progressive Corp. (PGR), have traditionally attracted younger drivers, Allstate has drawn in older customers. The company has long said its policyholders buy more protection, have more to insure, and are less likely to defect to a rival. But it's also been losing customers.

Allstate has run a motor club offering assistance similar to the American Automobile Association since 1961. Like AAA and the roadside assistance plans offered by other organizations, it charges an annual fee. AAA has more than 25 million customers to Allstate's 3 million.

-By Erik Holm, Dow Jones Newswires; 212-416-2892; erik.holm@dowjones.com

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