I'll bet few of you have heard of "Colossus." It's one
of the insurance industry's best kept secrets, despite that it is
used every day to cheat accident victims out of millions in compensation.
Colossus is a computer program insurance companies use to reduce the compensation
they pay to accident victims up to 20%. As reportedin the book From 'Good
Hands' to Boxing Gloves, insurance companies like Allstate simply
input the "savings" they want and Colossus goes to work. Allstate
wants higher profits? Sure, just tell Colossus how high you want profits
to go and Colossus will squeeze it out of the settlements paid to accident victims!!
Colossus works by generating "low" and "high" values
for a particular claim. For example, Colossus may generate a "low"
value for your claim of $8,000 and a "high" value of $10,000.
Remember, even the "high" value is lower than it should be because
Colossus has figured in the savings amount set by the insurance company.
Claims adjusters then uses these "low" and "high"
values to try to settle your case within that range. Some industry analysts
believe insurance companies rewarded claims adjusters by paying incentives
when they settled a claim within the Colossus range, but of course the
insurance companies generally deny this.
Consumer advocates have struck back at the big insurance companies using
Colossus, including Allstate. Multiple investigations and class action
lawsuits over Allstate's claims handling practices revealed the following:
Allstate used Colossus in more than 50% of all auto claims and settled
over 90% of all auto claims within Colossus guidelines!
As part of the settlement agreement with 47 states, Allstate agreed to
p ay $10 million toward a fund designed to monitor computerized claims
handling practices; agreed not to pay incentives to claims adjusters who
settle injury claims within Colossus' acceptable range; and agreed
to tell accident victims it uses Colossus with the following disclosure:
"One of the tools that our claim personnel may use in evaluating the
claim is a computer program known as Colossus, licensed by Computer Sciences
Corporation. Colossus uses a broad range of information about your injury,
treatment, and prognosis to determine the severity of your injury. Based
on this information, Colossus makes a recommendation as to the value of
your injury. The Colossus recommendation is only one factor among many
that our adjusters consider in reaching a decision as to the overall evaluation
of the claim. It is their goal to reach that decision promptly, fairly,
and based on an appropriate investigation of the facts and circumstances
of your client's claim. "
The settlement affects Allstate, and its Deerbrook, Encompass, and Northbrook
subsidiaries. Other insurers that use Colossus or similar software include
AAA Mid-Atlantic, ACE INA, American Family, American National, Atlantic
Mutual, California State Auto, CNA, Grange, Great American, Hartford,
HDI, Horace Mann, ICW, Motorists, Nationwide, Ohio Casualty, Safeco, State
Auto, USAA, Utica, Westfield, White Mountain, Winterhur Swiss, Allianz,
Fireman's Fund, GEICO, Automobile Club of CA, Liberty Mutual, and
If you suspect your injury claim is being undervalued by an insurance company
using Colossus or a similar claims settlement program, it's important
that you contact an injury attorney who knows how to fight for your right
to fair compensation. Feel free to call my office anytime to schedule
a free, no obligation consultation to discuss your case.