Ex-Allstate Insurance Adjuster Tells Court Of Company’s Bad Faith Practices

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Dec 29, 2019

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An ex-Allstate insurance adjuster recently told a Kentucky court about the company’s bad faith insurance practices that included strong-arming policyholders into taking lower settlement offers and manipulating claims data.

Profits over policyholders

According to news reports, a former Allstate Insurance Company adjuster told a Kentucky court that the company “dehumanized” its claim handling procedures as far back as the mid 1990’s – right around the same time that it hired the McKinsey Company, a New York consulting firm, to show it how to better maximize profits. The former adjuster testified that adjusters were:

  • Told to manipulate data from the company’s Colossus program – a computer program that provides claim figures – in order to come up with claim payments that were lower than they should have been.
  • Reprimanded in their performance evaluations for paying out too much in claims.
  • Instructed to keep track of plaintiffs’ attorneys who were willing to settle cases quickly and were less likely to fight the claim in court.

Unfortunately, allegations of Allstate’s bad faith insurance practices are not new. The insurer has been fighting to keep the now infamous McKinsey documents from the public for many years. Legal experts and consumer advocate groups believe that Allstate’s unwillingness to release that information means that the company has something to hide. However, Allstate maintains that the documents contain trade secrets that must be kept confidential. It should be noted that some of those documents were released earlier this year; however, experts say that the insurer has not produced those documents which show that it acted in bad faith. Many of Allstate’s policyholders seem to agree.

61% of Allstate policyholders not satisfied with service

A whopping 61% of Allstate policyholders said that they were either unsatisfied or very unsatisfied with Allstate service. Here are a few of their comments*:

  • BEWARE. This is by far the worst insurance company I have ever worked with. My agent’s office never answers their phone, and if you leave a message, they never call you back. I am in the middle of dealing with a claim and they are doing everything under the sun not to pay it – Posted 11/7/2008
  • [They] raised [our] premium for no valid reason! Posted 10/18/08
  • We have been insured for over 25 years [and had] one claim [for] a broken windshield. Allstate then cancelled [our] policy for earthquake and ground movement insurance. [They] just took our policy money and didn’t even say thanks. Don’t trust them – ever. Posted 10/6/08

If Allstate or any insurer acted in bad faith regarding your valid claim, contact an experienced bad faith insurance attorney to discuss your situation and evaluate your options. As always, consultations are free of charge, without obligation and are strictly confidential.

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