Allstate shorted drivers on rental car costs, a new class action lawsuit alleges

On Aug. 21, 2026, Jose Arce and Daniel Jackson filed a class action lawsuit against Allstate Property and Casualty Insurance Co. in the U.S. District Court for the Northern District of Illinois.

The complaint alleges Allstate booked rental cars for drivers its policyholders hit during an accident then reimbursed the drivers for less than those rentals cost.

The allegations

Neither plaintiff held an Allstate policy, according to the proposed class action. It alleges an Allstate-insured driver hit each plaintiff and carried 100% of the fault, making Allstate responsible for repairs and a temporary replacement car through its preferred vendor, Enterprise.

Arce says his accident happened Sept. 5, 2025, in New Rochelle, New York. He claims Allstate promised coverage for property damage, loss of use and other out-of-pocket expenses then set up an Enterprise reservation. Arce says took the smaller of the two vehicles offered, a 2025 Mazda CX-5 the company classifies as a midsize SUV, and kept it eight days at $36.60 per day for $352.46 total. Allstate authorized $267.24 and left $85.22 unpaid, the lawsuit alleges.

Jackson's April 29, 2026, accident in Alabama reportedly followed a similar pattern. He claims Allstate's letter said it would pay up to $28.31 per day for an intermediate vehicle from Enterprise and pay the prevailing market rate for that class of vehicle if he rented elsewhere. Enterprise provided him with a Nissan Altima without offering a choice, he says. His 24-day rental was $32.04 per day, or $824.73 total, and Allstate declined to cover $92.38 of it, the lawsuit states.

Allstate's responses

Arce reportedly complained to the New York attorney general's office and the state Department of Financial Services. Allstate replied that it agreed to cover an intermediate-sized vehicle at $27.75 per day plus tax and that Arce "elected to obtain a larger vehicle." The lawsuit disputes that account, noting Enterprise's website lists roughly 35 vehicle classes, that "intermediate electric" is the only one containing the word "intermediate" and that both vehicles Enterprise offered Arce were SUVs.

Allstate reportedly told Jackson his rental exceeded the reasonable amount it typically pays. The class action contests that claim, citing listings on Enterprise's own site and Expedia showing comparable vehicles over similar periods well above what either man paid.

The plaintiffs allege they never asked Enterprise to change the vehicle class Allstate reserved. Both rental agreements identified the rate source as "ALLSTATE INS-EXPRESS RENTALS," which they contend shows Allstate negotiated the price it later declined to pay in full.

The legal claims

The suit brings four claims:

  • Breach of the implied covenant of good faith and fair dealing, a rule requiring parties to deal honestly in carrying out an agreement, for a proposed nationwide class
  • Promissory estoppel, pled as an alternative, which lets a court enforce a promise someone relied on without a formal contract
  • New York General Business Law Section 349, a state law barring deceptive business practices, for a proposed New York subclass
  • Alabama Deceptive Trade Practices Act, for a proposed Alabama subclass

Jackson reportedly mailed Allstate a written demand under the Alabama statute on Aug. 4, 2026, and the company declined to tender a settlement, the filing states. The plaintiffs seek class certification, compensatory and treble damages, restitution, injunctive relief and attorneys' fees.

What the case means for drivers

The proposed class covers drivers insured elsewhere who accepted an Allstate-arranged rental from a preferred vendor and received less than the full charge. As of this writing, there is no settlement, no claims process and no money available.