Skip to comments.In Tough Hands At Allstate (strategy to limit claims payouts)
Posted on 03/22/2007 7:02:31 PM PDT by 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.
(Excerpt) Read more at businessweek.com ...
Such are the reasons why I don't buy Allstate.
No surprise. AllStateFarm are two companies I avoid. And I sell insurance for a living:
My mom didn't know. she is still fighting them to get paid for a claim. But, unlike many, she IS fighting them.
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.
For those of you in the Mid-Atlantic area, I highly recommend Erie Insurance. Their rates are competitive and their customer service is excellent.
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.
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.
Good thinking on their part. Thanks for your posts and the story.
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.
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.
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.
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.
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.
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.
Did you have a police report? We've had cars hit twice. We had police reports both times. Allstate and State Farm were the insurers of the people who were responsible for the accidents, and we had no problems getting our claims handled.
The problem with that is that right now it's his word against theirs. They can't sue him for revealing proprietary business information without tacitly admitting to the allegations.
Evidence in a case is public information unless the judge seals it.
Yes we did, but Allstate dithered around for 9 months before I got my money. Its a long story that I won't waste time with, but I will FOREVER hate those (deleted).
Scuttlebutt from the legal arena: State Farm recently (within the past 4 years) won a few big lawsuits it did not expect to win, and got a little cocky. They negotiated with far more vigor (and often walked from the table) in situations where they previously would not have. Apparently, the attitude is spreading.
Glad to see you're not "merely" a lurker anymore. Welcome to FR!
And thanks for the insight. I despise the insurance industry (worked as a wage-slave for'em during my undergrad days).
Benefits delayed = Benefits denied
Justice delayed = Justice denied
you seem to miss the point, I don't own allstate. I didn't buy it, the post was about 'good faith' settlements as outlined by existing law, transparency, sox practives and controls, and coercive tactics to circumvent the above issues.
F.Y.I. I own Geico but have to seek a good faith settlement from allstate.
By MICHAEL KUNZELMAN, Associated Press Writer
Wed Apr 11, 9:22 AM ET
NEW ORLEANS - E-mails sent by officials of an engineering firm that assessed Hurricane Katrina claims suggest that State Farm Insurance Co. wanted engineers to blame damage on flooding so that it could make minimum settlements with policyholders.
The e-mails, obtained Tuesday by The Associated Press, indicate that State Farm was threatening to dismiss Raleigh, N.C.-based Forensic Analysis & Engineering Corp. less than two months after Katrina hit on Aug. 29, 2005.
Attorneys for homeowners suing State Farm claim the e-mails support their argument that the insurer pressured its engineers to alter their reports on storm-damaged homes so that policyholders’ claims could be denied.
State Farm denies that the company pressured engineers to alter their conclusions.
State Farm and other insurers say their homeowner policies cover damage from wind but not rising water, including wind-driven storm surge.
The e-mails between Forensic president and CEO Robert Kochan and Randy Down, the firm’s vice president of engineering services, outline complaints about the firm’s work from Alexis “Lecky” King, a State Farm manager in Mississippi.
In an e-mail dated Oct. 17, 2005, Kochan says the firm will continue working with State Farm, but discusses needing to “redo the wording” of a report after a discussion with King “such that the conclusions are better supported.”
It also says King didn’t want local engineers to inspect properties because they were “too emotionally involved” and were “working very hard to find justifications to call it wind damage when the facts only show water induced damage.” She was also apparently upset that a report was based upon eyewitness accounts, the e-mail said.
In a reply dated Oct. 18, 2005, Down questioned the insurer’s motivations and questioned if there was an ethical problem with State Farm telling the firm what to put in reports. He also suggested that on another occasion, State Farm asked the firm to remove information from a report because “they would then have to settle.”
“I really question the ethics of someone who wants to fire us simply because our conclusions don’t match hers,” Down wrote in an e-mail dated Oct. 18, 2005.
“But what about the obvious fact that SF would love to see every report come through as water damage so that they can make the minimum settlement,” he wrote.
Chip Merlin, a Tampa, Fla.-based attorney who has sued State Farm on behalf of dozens of homeowners, said the e-mails are “the first paper evidence we’ve got where you can see engineers expressing concern about being pressured to change reports.”
“Whoever Randy Down is deserves a gold star on his forehead for being one of the most ethical individuals,” Merlin added.
Zach Scruggs, an attorney who is part of a legal team that sued State Farm on behalf of hundreds of homeowners, said Forensic turned over the e-mails as part of the pretrial discovery process for one of the lawsuits. The e-mails, he added, “confirm everything that we have always suspected.”
“What it says is pretty shocking,” Scruggs said. “This outlines the whole scheme of theirs.”
Kochan, in an interview, said plaintiffs’ attorneys are taking the e-mails out of context. King “just felt like we weren’t doing a technically accurate job,” but she wasn’t pressuring Forensic to change conclusions so that claims could be denied, Kochan said.
Down, who has since left Forensic and started his own engineering company, said in an interview Tuesday that he was relying on “secondhand” information about State Farm’s complaints and wasn’t directly involved in Forensic’s work on Katrina claims. He said the threat to fire the firm came “out of the blue.”
“The question was why,” Down added. “The initial internal discussion I heard is that they didn’t like our reports.”
State Farm spokesman Phil Supple rejected the notion that the company pressured engineers to alter their conclusions on storm damage so that claims could be denied.
“Our employees are committed to conducting themselves in an ethical and appropriate manner,” he said. “Any suggestions to the contrary are simply wrong.”
I see a circumstance where the pattern is institutionalized and really begs the question of RICO statuates where the insurance company is practicing organized crime. I think the CEO should be held to the same standards of Enron and Worldcom.
My suspicions are substantiated by anecdotal first hand knowledge as an individual whom did pass the MD insurance exam and a very knowledgeable indivdiual on variable annuity life insurance policies... I know a great deal about this subject and the practices should warrant a criminal probe.
In 1981 when I was licensed this would have been criminal.
Thanks for the Specialist Town link. Saw it earlier, and debated making a post of it, but people here are usually unwilling to read from sources like the Nation. Good article though.
They’ve got a tough lobby working on their behalf. I’m not sure they aren’t shielded by current law.
If the facts are purposefully distorted, willfull ignorance, in good faith, that is FRAUD. I have already contacted the MD State Department of environment and initiated a discussion with the individual in charge of handling waste fluids from cars, and examining the practice of returning wrecked automobiles to people whom due to on-going medical care, have not settled with the insurance company. I’m going to run an ad in the Baltimore sun of a drainage grate accross the street from where I stay which has a blue spray painted chesapeake bay warning on it, I may head to their headquarters and photograph the one there...
You have to change the law, go to the public comment sessions, get that on record, and then get it into the press..
I have started in MD. I heard something profoundly interesting in a discussion on medicaql reveiw boards and the VA, the assertion was: “anybody who questions the system or challennges it is pressumed to be gaming it.”
Well the assertion that there was not injury, the time it takes to get cracked teeth extracted, allow for gum fill, post set, and then a temp, and the final tooth takes close to a year! And thats PAYGO in absence of PIP.
So the question needs to be asked, if you dump that vehicle back onto the street, whom is responsible for leakage of fluids as a consequence of moving that totaled vehicle?
How many vehicles where this handled this way?
Current law, as it is legislated, is subject to the public comment, and the question I’m asking deserves a response which the Insurance commision ignores as they hold no public comment but the state of Maryland water quality has agreed to address.
It is bad enough they rippoff the injured and the insured, but pissing in the village well, and passing that cost to the taxpayer, is against the law!
Trust me as farm owner, I know the applicable law here on runoff, they are in violation of the law. Nobody has stipulated that yet....
While the law does specifically stipulate an assualt with per-se a baseball bat, it states bodily harm, and fraud goes to a systemic and organized effort to deceive and profit from establshed business practices.
Much arguing between them and my husband, and finally we got them to give us a semi-fair price for the vehicle, as long as we waived any medical claim. (My husband had been taken to the emergency room but our insurance had covered it. We were unsure if he would have any long-term dmaage from the accident.)
Well, we signed the agreement because we needed to buy a new car, and received a draft which we deposited. After about a week, my husband said, "Hey, they didn't ask for the car title."
We called a lawyer we knew who told us that our signature and the draft consituted a completed transaction, so the car was still ours.
So, I rendezvoused with a junk dealer from Kentucky (we were in Evansville, Indiana) along with my two children and sold him the car for a tidy spot of cash.
Three days later that claims adjuster called for the title and BOY was he mad! HA! I still smile when I think about it, all these years later.
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