They might use proprietary software to shortchange you on accident injury claims
If you're hurt in a car accident, chances are the information about this injury will be fed into a computer program called Colossus that generates settlement offers for bodily injury claims. And chances are better than average that the software is rigged to keep this offer low, warns the Consumer Federation of America (CFA).
New York state insurance regulators are watching these programs closely following a 2010 regulatory settlement which cost Allstate $10 million for "deficiencies" in managing and using Colossus, which is offered by CSC. New York’s examination concluded that Allstate failed to “tune” the software to reflect recently closed claims.
Others contend that the software is “tuned” to low-ball injury claims."Someone in the home office dials it back so that the best offer is really 20 percent below what it should be," says J. Robert Hunter, the CFA's director of insurance.
Pages in this slideshow:
- 10 dirty little secrets of insurance companies
- They use a FICO insurance risk score to figure out the price of your auto policy -- but you can't see that, either
- They might use proprietary software to shortchange you on accident injury claims
- They know if your attorney is a wimp
- They sneak percentage-based deductibles into your homeowners insurance policy
- They might replace your lost Pottery Barn items with Walmart merchandise
- They make hospitals charge other health insurance companies more
- They'll force you to buy a more expensive homeowner's insurance policy
- They don't tell you their "preferred providers" may be cutting costs
- They don't contact your life insurance beneficiaries when you die