A study conducted by the American Association for Justice (AAJ) found that among the worst insurance companies in America, by far, Allstate was the worst. This study looked at thousands of court documents, SEC and FBI records, state insurance department investigations and complaints, and testimony and depositions of former insurance agents and adjusters.
In the words of Allstate’s CEO, Thomas Wilson, “Our obligation is to earn a return for our shareholders.” That mission statement, adopted over a decade ago, lead the insurance giant to put profits ahead of policyholders. Among industry insiders, this strategy is known as “the three D’s: deny, delay, and defend.”
So what does this mean for policyholders and those injured by Allstate policyholders? It means that if they are offered any compensation at all, it is an unreasonable and low-ball offer. If the offer is refused, litigation will ensue and Allstate will employ aggressive and delay tactics, with the hope that the claimant will give up and abandon their claim. In fact, a former agent for Allstate, Shannon Kmatz, reported to the AAJ that by practicing the three D’s, pursuing claims would be “so expensive and so time-consuming that lawyers would start refusing to help clients.” And without lawyers to pursue their claims, where does that leave the claimant? Right where Allstate wants them: accept the lowball offer or nothing.
This is not mere speculation. AAJ interviewed former Allstate adjusters, who told tales of supervisors requiring them to lie to policyholders in order to deny coverage of keep payments low. Others speak of financial incentives to employees in exchange for low payments. And Allstate has paid tens of millions of dollars in fines for violating federal law. But what is $80 or $90 million to a company that in 2007 had profits of $4.6 billion, and assets of over $156 billion? Merely a cost of doing business, and living up to the mission of “earning a return for the shareholders.”
This policy of deny, delay, and defend, adopted in the mid-1990’s, saw the amount Allstate paid out in claims drop from 79% of the amount taken in in the form of premiums in 1996, to a payout of only 58% in 2006. During the same 10-year time period, Allstate profits more than doubled!
None of this is new to our automobile accident attorneys in Charlotte, North Carolina. We are experienced in dealing with Allstate and counsel clients accordingly.