In Tough Hands At Allstate (strategy to limit claims payouts)

Business Week ^ | May 1, 2006 | Legal Affairs

[amchugh]

It's fighting accusations that its methods deny policyholders legitimate benefits

David Berardinelli is something of a bon vivant. The Santa Fe (N.M.) plaintiffs' lawyer collects fine wine, has chefs from local restaurants over to cook in his home, and restores classic Porsches. He's also about to become a published author.

His book, From Good Hands to Boxing Gloves, won't burn up the best-seller lists. But it's already making waves. It tells the story of the key role played by management consultant McKinsey & Co. in reengineering auto insurance claims operations at Allstate Corp. -- and it's a story Allstate doesn't want told.

[amchugh]

I know this is an old article, but it just popped up at the InsuranceTransparencyProject.com blog (oh how exciting, a blog on insurance). This article generated mixed feelings for me, sort of like watching a weasel win in a fight with a snake.

[Aroostook25]

Such are the reasons why I don't buy Allstate.

[proudpapa]

No surprise. AllStateFarm are two companies I avoid. And I sell insurance for a living:

http://www.badfaithinsurance.org/indexdetaillist.html

[Eric in the Ozarks]

You'd have to have rocks in your head to buy Allstate. A minimum of research would tell you they just don't pay claims without a fight.

[Issaquahking]

I got into it with the crooks, after 18 years. Screw Allstate, Theiving ba$trds.

Riding with Statefarm. So far, my agent has contacted me a couple of times to lower my rates (same coverage)!

[Sunsong]

My mom didn't know. she is still fighting them to get paid for a claim. But, unlike many, she IS fighting them.

[studly hungwell]

I was driving to work one day, and the DJ on my radio station was going off on his auto insurance coming. Words like "thieving bastards", "lying SOB's", etc.

And then he came up with this.

"I feel it would be a service to the public to warn them about these thievig bastards. However, management says I can't mention their name on the air. So, let's just say that they may call themselves the good hands company, but all they did was give me the finger!"

I was laughing so hard I had to pull over.

[InsNerd]

I was a licensed insurance agent in Maryland in 1981. I have a claim with an insurance company now. The first claim in 17 years, I have never litigated an insurance company in court. Besides small claims squabbles, two in my life, I have never brought suit, even after back surgery from an on the job accident and two serious accidents in the 70's.

I was astonished at the manner in which the insurance company handled the claim I had after their driver ran two stop signs and t-boned me.

I oddly enough know the insurance industry and adjudications of suitability for hire, and the impact of credit rating upon them as well.

I knew that there had been a hegelian shift, or that the Maryland Insurance commissioners had become negligent in their oversight.

In short, I have not settled and thus had the emergency room bills sent to a credit collection agency as a result of the non-settlement.

Without attempting to put to trial the issues in this forum I can say that the insurance company repeatedly broke what would have been Maryland law when I sold insurance in 1981.

I have spoken with the insurance commisioner's office in MD and he essentially gave me the standard response that a formal complaint, blah blah...

But in summation the boxing gloves approach is coercive to lets say: a military personnel individual whom's spouse was injured, expenses were mounting, treatment was in progress, and the credit collectors had flagged that clearance of the spouse.

Ironically the Ins. commisioner was aware of the predatory lending and the impact it had had on clearances with active service members.

But he seemed unaware that 70% of all contested adjudications of suitability were declined for medical bills.

It has been years, a half decade since I have posted on this forum, but far from being boring, your article illuminates something that seems terribly wrong to me.

I abhore insurance fraud, hate the entitlement crowd, but also know from passing the insurance exam that what this company is doing is 'not in good faith' and constitued fraud, willfull ignorance, and was in violation of law.

Your article shed light on how a telemarketer type adjuster, whom admitedly had not taken a insurance exam, could use an expert system and provide crisp answers one moment, and then the next under focused questioning break the law with misrepresentations of the insurance law.

I'm not that happy of a camper with the Republicans, but still lurk by here for content.

Best article I have read in weeks.

It clarified how things deteriorated so badly in MD and why there needs to be people of principle to take a stand.

Great article, far from boring.

[NittanyLion]

For those of you in the Mid-Atlantic area, I highly recommend Erie Insurance. Their rates are competitive and their customer service is excellent.

[Eric in the Ozarks]

Good for her. We lived in the south metro of the Twin Cities in 1998 when a series of hail storms when through in late March/early April. Every house in a ten mile swath had damage. Our insurance company, The St. Paul (now part of Travelers) had adjusters at our house within four days and authorized a new shingle roof, window replacement, siding, etc., without argument. Because we had a mortgage, the entire claim check was sent to Wells Fargo, which cut checks to us as I brought in the roofing company, the window repair and so on.
I'll never forget the claims manager, after all the repairs were done ($100,000 +) who said, "If you find any hidden damage, just call and we'll write you another check."
Our insurance man reported other home owners with The St. Paul had the same experience. The company knew they were going to get clobbered, so why not turn it into good PR ?

[Cacique]

btt

[jude24]

I worked at a personal injury firm over the summer. I went in a little embarrassed about doing personal injury work. I left convinced that the insurance companies are the real crooks - and Allstate was one of the worst.

[middie]

Agree. All State, State Farm, Nationwide and Farmers are all commercial pirates whose claims doctrine is to deny every claim, pay a few which they then hold up in advertisements as standard practice and spend millions to scam the public and grind claimants into the litigational mill grist. State insurance commisioners are political animals who know better than to buck these big time monied powers and thus turn their collective head, deflect complaints with rote fluff and otherwise leave the average citizen at the tender mercies of these business criminals. Were it not for the abilities and determination of a cadre of lawyers, the bad guys would get away with their tactics without a fight.

These insurance giants are not going to change their historic doctrine unless several states' legislatures, governors and insurance departments grow some cajones and enforce the statutes that exist but are ignored in practice.

[Sunsong]

The company knew they were going to get clobbered, so why not turn it into good PR ?

Good thinking on their part. Thanks for your posts and the story.

[freedomfiter2]

You'd have to have rocks in your head to buy Allstate. A minimum of research would tell you they just don't pay claims without a fight.



Well yeah, there's that , but they do have higher premiums.

[c-b 1]

I am an independant auto damage appraiser, about five years ago Allstate started sending me claims, right after I completed the first file, and sent it to them they called, and whined about this, and that, the second one an appraiser who worked for me did, I went over it carefully with him before we sent it in, again whine, whine whine.

The third claim came, I went out to inspect a motorcycle, the owner was talkative, he wasn't happy, the Allstate staff, had tried to chop, chop, chop, over the phone, he was to the point of going to a lawyer, I went over the bike carefully, wrote a fair estimate, and sent it to Allstate, immediately more whining. By then I had figgured out what they were doing, they wanted me to go out and beat prices down, after their staff made the vehicle owner mad, in other words, put me at the head of the line for a law suit.

A couple of days after I sent that file in, a supervisor called, talked to my wife, (office manager) the supervisor said that they didn't want me, or my appraiser doing any of their files, my wife said it's just the two of them, there is no one else. The supervisor said they wouldn't be sending us any more work.

That made my day, it saved me from calling Allstate, to tell them I wouldn't do any more work for them.

[packrat35]

I was hit by someone with Allstate insurance. They were at fault and got the ticket but put me through 9 months of crap. I hate them.

[GATOR NAVY]

I find this article and all the negative posts on this thread improbable. Allstate has a deep-voiced black man as their TV spokesman. That alone guarantees their sincerity.

[balch3]

the only issue is this guy should have his pants sued off for revealing propriatary business information. Allstate isn't forcing anybody to buy their insurance.

[Buffalo Bob]

My wife was injured by an Allstate driver who ran a red light. Witnesses stayed at the scene, police report clearly showed it was the other driver's fault, even the other driver openly admitted that fact.

My wife was out of work for 7 months due to her injuries. This was at a time when I was out of work (thanks Outsourcing) and we had no health insurance. Allstate would not pay a penny for any medical tests or procedures, things my wife absolutely needed. We were trying to be reasonable, but they just kept up their "settle the claim now before knowing the true impact and full costs of the injury" stance.

We have paid auto insurance for 35 years, and both have zero tickets and zero accidents. And yet this is how we were treated when their at-fault driver broke the law and injured my wife.

It's a wonder I am not in jail, for going Postal.