purchase, george & murphey.

purchase, george & murphey.


Consumer Group Says Insurance Companies Low Ball Injured People

January 15, 2011

The Consumer Federation of America has confirmed what many Erie injury lawyers have been telling clients for decades. Car insurance companies intentionally “low ball” injured people, even going so far as to employ sophisticated and expensive computer software programs to make unfairly low settlements with people who don’t know enough to protect themselves.

One of the more well known computer programs is Colossus, a software system that uses injury coding to produce a range of settlement values. Insurance adjustors use the Colossus coding system to reduce an injury to quantifiable data and then the Colossus system assigns a settlement range. The insurance company may tweak the system to produce unfairly low values. Adjustors are rewarded for keeping settlements within the unfairly low range assigned by the computer software, the report says. The result is an insurance claims management approach specifically “calibrated to systematically underpay claims.”

The Colossus system does not even attempt to account for past or future medical expenses or lost wages and thus assigns a value for only part of the case. Moreover, it does not consider individual characteristics of the claim or the specific impact of a particular injury. As a result, the Colossus evaluation system is inherently incomplete and, when relied upon blindly, unfair.

Concerns raised by CFA apparently led to an investigation by the National Association of Insurance Commissioners and the Illinois Insurance Department of Allstate, one of the insurance companies using Colossus. The investigation resulted in an agreement by Allstate to change its practices and provide more information to consumers.

Allstate’s agreement is far from a perfect protection for consumers and Allstate is not, in any event, the only car insurance company using Colossus or programs like it. Erie Insurance, Liberty Mutual, Progressive, CNA and Nationwide are just a few of the many insurance companies believed to be using case evaluation software as part of an effort to systematically reduce payments to injured people.

If you suspect that an insurance company is low balling you and may be using computer systems to help it cheat you out of fair compensation, consider a consultation with an experienced Pennsylvania injury attorney. An experienced Pennsylvania accident lawyer ought to be able to tell you whether the offer you’ve received is unfairly low and whether it should be higher.

For a free consultation with one of our experienced Erie injury lawyers, call today locally at 814-273-2010 or toll free at 814-273-2010.