The Consumer Federation of America and a concerned group of Portland personal injury attorneys have issued a warning to consumers that insurance companies are using a powerful software tool to keep claims payouts unrealistically low. The software package is used to lowball customers who have made homeowners and auto insurance claims.
Two former employees within the insurance industry have verified that software known as the Colossus package is used by insurance companies to reclassify injuries, showing them to be less serious than even the claimant’s doctor has diagnosed. Both Mark Romano, a former Colossus expert at insurance giant Allstate, and Robert Hunter, a former insurance commissioner in Texas, have verified the claims being made about the insurance industry.
Using Colossus to Justify Lowballing You
The Colossus software, as well as other similar insurance software packages, allows insurance companies to fine tune claims, always in their favor of course, thereby maximizing profits for their shareholders while drastically reducing the amounts paid out to genuinely injured clients.
Recent claims regarding insurance company practices include:
- The use of software to downgrade claims has been going on for about 15 years now.
- A number of insurance companies have boasted increased profits of up to 20 percent after replacing human claims adjusters with the automated software packages.
- The increased profits have been achieved mainly by reducing the amounts paid out to customers and victims who had filed personal injury liability claims.
The Insurance Company’s Defense
As you would expect, the insurance companies deny that they are lowballing claimants through the use of complex software packages intentionally designed to baffle people making perfectly legitimate claims. The American Insurance Association (AIA) seriously questioned the results of the recent study, saying among other things that:
- Most (not all) insurers use methods in addition to claims software to determine how much should be paid in the event of a personal injury claim being filed against them. The AIA neglected to say how much, or what percentage of the final determination of a claims payout is based on the number the software package comes up with.
- The AIA says the software tools are “useful” as a means to apply fairness and consistency to the claims handling process.
- Willem Rijksen, Vice President of Public Affairs at AIA, said that generally speaking, trained claims adjusters are involved throughout the process. Rijksen didn’t specify in what percentage of cases human adjusters have the final say in amounts paid out.
- Finally, they said Colossus only helps insurers assess the severity of injuries but does not in and of itself make payments to claimants.
While CSC (the company that developed and marketed the Colossus software package) says the software merely helps insurers accurately assess the severity of injuries, Robert Hunter says that he’s convinced millions of Americans could be at risk of being inadequately covered in the event of sustaining a serious injury.
Hunter says that more than half of the 20 largest car and property insurance companies in America use CSC’s Colossus; others use similar software from Colossus’ competitors, but in all cases, the software is designed to maximize insurance company profits. The only way to effectively do that is to lowball customers in need of compensation to cover medical bills, ongoing treatment and lost income.
CSC’s Colossus Software “Not Responsible” Company Says
According to Ed Charlton, Vice President in CSC’s property and casualty insurance division, Colossus can’t be blamed if genuine injury claimants receive less than they should. “Payments are negotiated between the insurance company and its claimants,” Charlton said in an e-mail, effectively absolving the company’s software from any responsibility for payments that are less than fair. He said the software merely contains an enormous database of medical and insurance-adjusting information.
This may explain why CSC has shifted its marketing slant from the original version, where they attempted to sell the software as a money-saving tool to insurance companies, to their latest version, whereby they claim the software simply brings consistency to the assessment of injuries. Personal injury attorneys say the marketing approach was changed after CSC materials were made public during a 2009 class-action lawsuit against CSC, which was settled out of court.
When someone is injured in an Oregon car accident and it wasn’t their fault, they shouldn’t be at the mercy of some software package that determines what they should be paid to cover their medical bills, out of pocket expenses and for their pain and suffering.
Insurance companies are far more likely to offer a fair settlement in a far shorter period of time when they are facing a good personal injury lawyer who will not accept a figure that has been conjured up by a fine-tuned software package. Before contacting the at-fault party’s insurance company, give yourself every chance of receiving a fair settlement package by contacting a good, determined personal injury lawyer.