Has Colossus Cheated You?

By Aline Miranda on March 16, 2011

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 reported in 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 pay $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, Winterthur Swiss, Allianz, Fireman’s Fund, GEICO, Automobile Club of CA, Liberty Mutual, and Progressive.

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.