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Allstate Insurance Fined $10 Million For Improper Use of Claim Program

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Allstate Insurance was recently fined $10 million for the improper use of the computer program known as Colossus in evaluating injury claims.

Colossus is a program used by Allstate and a some other insurance companies to evaluate bodily injury claims. In this program, claims representatives enter data from a claim, such as the nature of claimed injuries, and other essential data, and Colossus produces a recommendation for settlement.

However, if claims representatives enter data incorrectly, or inconsistently, the company will be guided to make incorrect or unfair offers.

The settlement, which is the result of an 18 month long multistate investigation of insurance regulators from 41 states, includes a fine of $10 million plus Allstate will be required to notify claimants that it may use the software program to “adjust” claims and take more and better measures to oversee the program and ensure that company personnel follow established criteria and rules to enter data about claims made to the company.

Category: Auto Accidents


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