Why insurance companies don’t want you to hire a lawyer

A member of the American Association For Justice obtained a copy of a 603-page internal Allstate document through open discovery after their client was offered only $9,000 for a claim with medical expenses that exceeded $23,000. The document was titled the Allstate Claim Core Process Redesign Implementation Training Manual, and has apparently been updated through at least July 1, 1995. The document contains a wealth of information on how Allstate trained adjusters to handle claims in a way that would benefit the company.

Consumers are rarely given a chance to see how insurance companies operate from the inside. Although they’re required to be given copies of their own insurance contracts, they’re almost never given the full information on what motivates their claims adjusters or what a reasonable claim might be after an accident. The truth is that insurance companies answer to shareholders, not to claimants. Insurance adjusters are trained to maximize profit for their company by paying out the smallest possible amount in damages.

The document captures Allstate in the process of transitioning from a loosely organized internal system to one with step-by-step procedures for handling the vast majority of claims. In the process, the document’s creators hoped to reduce Allstate’s costs by creating a system that would prevent more claimants from seeking out attorney representation.

The document shows a clear pattern in the way Allstate trained insurance adjusters. Allstate knew that claimants with attorney representation were likely to cost the company more by expecting and negotiating higher settlements. While Allstate couldn’t legally tell claimants not to hire an attorney, they could discourage them from hiring an attorney by implying that an attorney would not be necessary and by following up quickly and persistently right after an accident, while a claimant had not yet had time to come to a decision about attorney representation. A frequently repeated script included the following lines: “At any time in the process you may choose an attorney, however, please allow me to make an offer first.”

Most importantly, insurance adjusters were taught to “establish rapport” with claimants as quickly as possible, giving them the feeling that they were on a team instead of on adversarial sides of a claim. Insurance adjusters were given scripts that were believed to come across as more empathetic. They were also strongly encouraged to build rapport by pushing for face-to-face contact with claimants, even going so far as to travel to their homes or workplaces, especially if they suspected that claimants were confused or uncertain about the claims process. A page documenting the ideal profile of a department handling claimants who are not represented by attorneys gives “attorney representation rate” and “settlement results” as two of the most important primary performance measures of the department. Meanwhile, adjusters working with claimants represented by attorneys are expected to be “resourceful, aggressive, not afraid of professional confrontation.”

The documents also show that Allstate collected information in order to profile attorneys, law firms, and medical providers. This information on the “disposition” of the people working on behalf of injured claimants was shared between adjusters in a central database. Adjusters knew which attorneys were willing to fight for their clients to get the highest value paid out, and which were willing to accept a lower offer if it meant a quicker settlement.

Of particular concern to Allstate were cases involving soft tissue injuries. Claimants with these conditions felt a substantial amount of pain and often incurred high medical bills for physical therapy, massage, chiropractic work, and other care. Soft tissue injuries often don’t show up on radiological imaging, blood tests, and other tests that juries believe to be “proof” of an injury. Allstate dubbed cases involving soft tissue injuries MIST cases and developed a special set of protocols for refusing and reducing these claims by disputing whether the claimant was actually injured.

You can view a full version of the document here.

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