The state of California Insurance Commissioner, Steve Poizner, announced on March 19, 2008, that his agency was ordering Allstate Insurance Corporation to reduce insurance rates in California by 15.9%. So what’s the reason Allstate’s rates are so high? So high that the California Insurance Commissioner has to order the company to reduce prices? Confirming what personal injury attorneys have known for a long time, it’s because of Allstate’s claims handling process. Allstate and a few other select companies have for years played hardball. Instead of offering a reasonable amount when one of their drivers hurts someone, they offer low ball figures and force people to sue. Since many people are afraid to see a lawyer or don’t want to put up with a lengthy court process, they accept the offer. As a result, Allstate’s claims payments have dropped to 50% of the level they were in the early 1990s. So at least people who purchased Allstate insurance should be happy, right? You’d think so. You’d think Allstate would pass the savings on to them. No such luck. During this same period of time Allstate requested over 700 rate increases across the nation. The Allstate system of claims handling, commonly referred to by personal injury lawyers as “Delay, Deny and Defend” or “The sue to collect company” was developed by a consultant used by some of the other major carriers, including USAA, State Farm, Liberty Mutual and others. If you or someone you know was injured in an accident and one of these companies is on the other side, don’t expect a reasonable settlement. Instead expect an attempt to drag your case out as long as possible. The good news? When people do go to court against Allstate, they usually win. Our office took a case to trial against Allstate last month for a very nice woman who was hurt when her car ran into a truck that blew a stop sign. The Allstate offer? $0. That’s right, they wouldn’t even make an offer. The lady would have probably settled for payment of her medical bills and $5,000. But she had no choice. Allstate told her to go away or go to court. Fortunately, she chose the right path. A jury awarded her $31,000.
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