Congratulations to Allstate for Being No. 1 on the List of the 10 Worst Insurance Companies

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

Most people have heard of Allstate Insurance even if this is not their insurance carrier.  Allstate Insurance are the “good hands” people who are there when you need them.  Unfortunately, those hands are not the ones you want to rely on for a winning outcome even if you have a valid insurance claim despite the company’s heavy advertising during college football games.  Allstate was judged the worst insurance company in the United States by the American Association for Justice (AAJ).

The insurance company’s well-established claims handling process has been nicknamed “The Three D’s: Delay, Deny and Defend”.  According to the AAJ, Allstate routinely offers a ludicrously lowball settlement offer to policyholders.  The company developed its effective system for ripping off policyholders during the 1990’s when it hired the consulting firm, McKinsey and Company.  One aspect of the McKinsey strategy involved using a computer program called “Colossus” to value claims and generate ridiculously inadequate settlement offers.  When policyholders accepted these lowball offers, they were treated with “good hands” because they helped the insurance company improve their bottom line.  When policyholders scoffed at the offers, the good hands turned into “boxing gloves” according to the AAJ.

How blatant was The Three D’s strategy?  Former Allstate agent Shannon Kmatz disclosed that a presentation by McKinsey including an alligator with the caption “sit and wait.”  The theory was that if the insurance company delayed long enough the insured would simply give up and accept the lowball claim.  The strategy was even intended to discourage attorneys from taking cases involving denied or lowball claims by Allstate because pursuing the cases would involve prolonged delays and excessive litigation costs.

But wait, it gets worse!  Former Allstate employees indicated adjusters were rewarded for successfully lowballing claims.  One adjuster reported that he received a new refrigerator because he was successful in arbitrarily denying a fire claim based on arson allegations.  I am left to wonder whether the policyholder who was forced to live in a motel after his or her home burnt to the ground had a refrigerator in the room.

While it might be tempting to dismiss these egregious practices as isolated incidents, the statistical data compiled by the AAJ does not support such a conclusion.  Allstate is the subject of more complaints than almost all other insurance carriers according to the National Association of Insurance Commissioners.  The insurance carrier’s tactics toward policyholders have subjected it to punishment in a number of states that include Florida, California, Texas, Maryland, Louisiana.  For example, Texas fined Allstate $70 million while Maryland imposed an $18.5 million fine.  In the Texas case, the company systematically overcharged homeowners.

The financial tactic of dragging out the settlement process rather than paying the full value of a homeowner’s insurance claim is very effective.  The challenge facing homeowners is that the alternative of living in a hotel or with family is a stop gap solution.  Because homeowners feel the need to resolve their claim and repair their home to the extent feasible, it is difficult to win a war of attrition without legal assistance.

If your insurance company is refusing to pay your claim or unreasonably delaying your claim, my law firm might be able to help.  I am an experienced Florida insurance claims attorney who handles disputed claims in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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