In 1925, Sears held a national contest to decide the name of a new brand of car tires. After over two million name submissions, “Allstate” was chosen. The trademark was adopted the next year. The tires’ success in the catalog and retail stores prompted Sears Chairman General Robert E. Wood to praise the Allstate tire’s contribution to Sears’ retail store success.

The idea for Allstate Insurance Company came during a bridge game on a commuter train in 1930, when insurance broker Carl L. Odell proposed to Wood, his neighbor, the idea of selling auto insurance by direct mail. The idea appealed to Wood, and he passed the proposal to the Sears board of directors, which approved it. Allstate Insurance Company, named after Sears’ tire brand, went into business on April 17, 1931, offering auto insurance by direct mail and through the Sears catalog. This was in line with one of the objectives of a company to sell automobile insurance in the same manner as Sears sold its merchandise.

Lessing J. Rosenwald was Allstate’s first board chairman, and Odell was named vice president and secretary.

In 1933, at the Century of Progress World’s Fair in Chicago, Allstate’s Richard E. Roskam sold insurance at a booth in the Sears pavilion. In 1934, Allstate opened its first permanent sales office in a Chicago Sears store.

In 1941, only about a quarter of US drivers had auto liability insurance. This led to the state of New York passing a law which established the financial responsibility of drivers for damage or injuries resulting from auto mishaps. That law inspired legislation in other states, and by the mid-1950s nearly every state had some sort of financial responsibility law on its books.

In 1949 the Allstate Headquarters Building was completed at 3245 W. Arthington Street in Chicago. The mid-rise building is currently vacant (as of 2013) and in danger of demolition. The building is noted for its early post-war mid-rise construction. This location was vacated when the company relocated in the post-war years.

In 1967, the company’s home office was moved from Skokie to Northbrook, Illinois. Allstate continued to sell additional types of insurance to customers throughout the decade.