In many cases the answer is yes. Most, if not all, major insurers use a software program to assist with processing injury claims. There is nothing illegal or unlawful about that. Insurers say that they use these programs to ensure consistent handling of claims.
Are there other motives? Yes – greed!
Let’s look at one example, Allstate. Undoubtedly you have seen the commercials and heard Allstate’s question: “Are you in good hands?” This simple question is designed to persuade you to rush out and buy insurance from Allstate.
I encourage you to read a book titled, From Good Hands to Boxing Gloves: The Dark Side of Insurance, by David Berardinelli. This book details how and why Allstate adopted the use of a computer program known as Colossus. Colossus is a computer program that is giving insurance companies an organized systematic way to reduce their claims payouts. The book highlights how Allstate has used and continues to use Colossus as a means to reduce claims payouts and increase profits.
Using a computer program for this purpose does not square with existing insurance law. According to one report, Allstate was seeking to reduce claims payouts by a set percentage over a set period of time. What happened to an individual honest evaluation of each and every claim? What happened to paying what is owed? With an honest evaluation, how can the same claims become worth less? What happened to “good hands?”
When buying insurance, I suggest you ask your insurance agent about the claims practices used by your insurance company. Consider asking whether the company uses Colossus or a similar program, the average amount paid per claim over the last ten years, and ask for records concerning satisfaction by customers who filed a claim.
We buy insurance with the hope that we will never have to make a claim. We buy with the assurance that we are protected. You should know when buying insurance whether you will actually be protected in the event of a claim or whether you can expect your insurance company to do everything in its power to minimize its payout to you. Armed with this information you can make an intelligent choice about from whom to buy insurance.