Allstate has paid $10 million to settle with insurance regulators over
unfair claims practices involving its use of
. The regulatory action focused primarily on Allstate’s use of claims
handling software, particularly the software program, Colossus. Colossus
is a software program which allowed a computer, rather than a person,
to determine settlement offers for injury claims from auto accidents.
Regulators found "inconsistencies" in the way Allstate used
the Colossus software program.
In addition to a $10 million fine, Allstate agreed to make a number of
changes to the way they handle injury claims, including: Providing notice
to claimants that Colossus may be used in handling their injury claims;
Establishing uniform criteria for how Colossus is used in handling such
claims; Auditing its use of Colossus and bodily injury claims handling
to adhere to written guidelines and procedures to make settlement of injury
claims more fair; Allowing claims adjusters to settle injury claims based
on more than just the value set by Colossus; And not providing incentives
for claims adjusters to settle claims for the value set by Colossus.
Not surprisingly, Allstate denies it used the Colossus program to systematically
under-compensate accident victims.
If you, or someone you know, has been injured in a car or motorcycle accident,
call my office to set up a
free case evaluation and to find out about your rights.