Home Blog Motorcycle Accident Allstate Pays $10 Million to Settle Unfair Colossus Claims Practices

Allstate Pays $10 Million to Settle Unfair Colossus Claims Practices

By Aline Miranda on May 9, 2011

Allstate has paid $10 million to settle with insurance regulators over unfair claims practices involving its use of Colossus. The regulatory action focused primarily on Allstate’s use of claims handling software, particularly the software program, Colossus. Colossus is a software program which allowed a computer, rather than a person, to determine settlement offers for injury claims from auto accidents. Regulators found “inconsistencies” in the way Allstate used the Colossus software program.

In addition to a $10 million fine, Allstate agreed to make a number of changes to the way they handle injury claims, including: Providing notice to claimants that Colossus may be used in handling their injury claims; Establishing uniform criteria for how Colossus is used in handling such claims; Auditing its use of Colossus and bodily injury claims handling to adhere to written guidelines and procedures to make settlement of injury claims more fair; Allowing claims adjusters to settle injury claims based on more than just the value set by Colossus; And not providing incentives for claims adjusters to settle claims for the value set by Colossus.

Not surprisingly, Allstate denies it used the Colossus program to systematically under-compensate accident victims.

If you, or someone you know, has been injured in a car accident or motorcycle accident, call my office to set up a free case evaluation and to find out about your rights.