by L.A.S.
Hi, I haven't posted in awhile, but that doesn't mean I haven't been thinking of my readers.
A new article appeared in The Post and Courier about the insurance software called Colossus. This payment software calculated what the insurer should pay out on a given claim, given all the details of damages. It was a great advance, designed to speed up claim processing and payments.
However, some companies abused this software and tweaked it to deliberately underpay their claimants. A $10,000 claim would only be paid say, $4,300. In this way, the Colossus system was a tool to maximize profits rather than improve service and consistency.
The insurance company described in this article is Allstate, one of the more successful newer companies around. But many companies use Colossus or similar software, so I am not letting any of them off the hook. Still, Allstate's use of the software was offensive enough that it was fined $10 million dollars in a 2009 case. But heck, they make that in a day.
Too many insurers -- especially in the property and casualty business lines -- have as their main strategy “Delay, Deny, Defend,” which is incidentally the name of a book about the insurance business.
Only briefly touched on in this article was the fact that too many state insurance commissioners did a poor job of oversight of their insurers who operated in their state. I too, have suffered from the delay and deny strategy in a claim I tried to press in 2010. I have still to see a proper settlement on that claim.
Anyway -- the whole article is here: http://www.postandcourier.com/article/20121202/PC16/121209871/1165/storm-of-money-insider-tells-how-some-insurance-companies-rig-the-system
I wish you the best in dealing with your own insurers on any claims you have. I regret that I am unequipped to help with specific claims problems.
Sunday, December 2, 2012
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