Study Reveals Insurance Companies Unfairly Deny Claims

11/17/2008 | Unfair Insurance Practices/Bad Faith

A recent CNN article revealed that its study of claims and interviews with industry insiders reveal that many insurance companies unfairly deny claims or offer far less than they are worth. This revelation is nothing new to attorneys who handle automobile accident cases. It has been known for years that companies handle these cases (known as MIST, minor injury soft tissue) in "bad faith." They use a computer program known as Colossus to determine they value of a claim. This computer program is unfair and artificially lowers the vaule of a claim. Some companies hired a giant firm call McKinsey & Co. to help them reduce costs. In Allstate's case, an internal memorandum recommended that Allstate cover its "Good Hands" with "Boxing Gloves" if injured parties refused its low offers. I've heard that in the upcoming week, WAVE 3 will be running a story that 1/3 of all accident claims are fraudulent. I wonder what industry started this story???

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