Consumer Advocacy groups claim that certain car insurance companies utilizing computerized systems in processing claims are providing unfair ‘low-ball’ claims payments to people injured by automobile accidents.  As a licensed Property & Casualty Agent with thousands of auto insurance clients through out the US, information like this disturbs me.

The Consumer Federations of America (CFA) alerts American citizens that Colossus software and other programs utilized by insurers to calculate costs on bodily injuries such as pain and suffering, and aguish, lack in the consideration of “special” damages such as past or future bills related to losses and reductions in wages/liability-related questions, or issues like the credibility of witnesses. J. Robert Hunter, CFA Director stresses that consumers should be very cautious in dealing with bodily injury claims generated by computer software instead of live humans. He adds that insurers corrupt the results of computer system through modifying results, for the purpose of insufficiently examining each factor contributing to a crash.

When adjusting bodily injury claims, an adjuster normally investigates through medical records and decides which Colossus injury codes best fit the bodily injuries sustained by the consumer, says the CFA. Depending on this, the software will provide a dollar value range for the adjuster to utilize in the actual pay out. Some insurers can also adjust the programs so that claims are made to ‘low-balled’ for the purpose of saving costs. Furthermore, adjusters occasionally receive incentives for settling claims at or near the range stipulated by the modified Colossus.

CFA is advising all consumers to protect themselves from unacceptable low claims through:

–          Through inquiring, finding out if the offer is calculated by a computerized system like Collusus. (Allstate is required to disclose this information but for others insurance providers, this may be optional.)

–          Inquiring regarding the higher and lower boundaries of offers generated by the computerized system.

–          Be aggressive through filing complaints when an insurer declines to file a claim on the high end of the range. In addition, seek legal help through the state insurance commissioner.

As the President & Managing Agent of InsureDirect.com for nearly 20years, I have never once received a complaint regarding a client not receiving the claim compensation due to them.  As an independent insurance broker, I represent my clients – not the auto and home insurance carriers. If you ever have a complaint regarding any matter, you can reach out to me directly through my email address mdortch@insuredirect.com. I will respond to you immediately regardless the issue.

-Mike