Allstate's gas handout fuels not-so-good feelings

When gasoline is selling for about $3 a gallon, and one station drops the price on the pump to zero, the scene is likely to get a little intense.

At least it did in Milwaukee earlier this week when two fender-benders occurred, four people were arrested for disorderly conduct, and three policemen were sent to a hospital as a precaution after getting splattered by one person's bloody nose.

The occasion for the fuel freebie: Northbrook-based Allstate Corp., the nation's second-largest auto insurer, wanted to reward the citizenry of Milwaukee--for its safe-driving record, no less.

"We've had four events like this over the past two years with more than 2,800 motorists receiving free gas," Allstate spokesman Mike Siemienas said Thursday. "This is the first time that any incident has occurred."

Allstate giveaways this year in Sioux Falls, S.D., and Phoenix went off without a hitch.

But in Milwaukee, hundreds of drivers waited for hours for a free 10-gallon fill-up that Allstate sprung for at one station. The line, two miles long, spilled into a residential neighborhood, stranding some homeowners in their driveways when they needed to get to work.

A police spokeswoman told the Milwaukee Journal Sentinel that based on Allstate's past experiences, officers didn't arrive for traffic control until 5 a.m. At least 400 people were lined up before Allstate turned on the pumps at 6 a.m.

Allstate said the fights and collisions didn't occur close to the gas station, where it gave away 7,000 gallons of fuel.

The company will continue to conduct its best-driver survey and "recognize" the cities with the safest drivers, Siemienas said. He didn't elaborate, however, on what that future recognition might entail.

Allstate isn't the first financial-services business to sponsor a gas giveaway that will live in infamy. In February 2005, a Charter One Bank gas giveaway in Ohio resulted in traffic snarls and finger-pointing. The bank said the Akron Beacon Journal's publishing of the promotion's location "was a serious issue."

The newspaper, however, pointed to bank ads announcing the location of the giveaway and retorted "perhaps Charter One should have paid closer attention to logistics."

Then, in April 2005, Chase bank apologized to Urban County Council for inconveniences caused during gas giveaways that caused gridlock on four main Lexington, Ky., roads, the Lexington Herald Leader reported.

Police, despite racking up $3,000 in overtime that Chase paid for, said they advised the bank not to hold the promotion. The bank didn't listen, they said. But Chase denied reports that police weren't on board with the program.

In May 2005, Citizens Bank, whose Citizens Financial Group Inc. parent also owns Charter One, told the Boston Globe it would continue to do gas giveaways, even after police shut down the promotion at one station after traffic backed onto an interstate highway. But the bank said that, in the future, it would not release the stations' locations.

Give them credit: Three Illinois institutions are among the 150 biggest credit unions, as ranked by loan and lease portfolios. Trade publication American Banker ranked Citizens Equity First Credit Union in Peoria 14th, Alliant Credit Union in Chicago 16th and Baxter Credit Union in Vernon Hills 73rd.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.