Underpaid Insurance Claims: How Insurers Use Computer Systems to Game the System

4 October 2013

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 October 4, 2013
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Category: Insurance Claims

A recent study, which was published by the Consumer Federation of America (CFA), found that computerized claims’ systems, which are used by a many of the nation’s top insurance carriers, can be adjusted to make insufficient payout claims to victims.

What does this mean for the general public?

Mark Romano, who is the CFA’s claims project director, said the following about the findings:

“This report is a wake-up call for consumers and regulators who are not aware of the many ways that computer claims’ software can be manipulated to produce unjustifiably low injury payments to consumers and tens of millions of dollars in illegitimate savings for insurers.”

What claims system is being used most often?

Colossus is the most common computer claims’ software being used today. Companies such as Encompass and Allstate have used the software for years. The software is sold by Computer Sciences Corporation (CSC).

Why would an insurance company use software to determine claims?

The software is designed to help insurance companies evaluate bodily injury claims. However, many insurance companies use the software; it allows them to reduce payments to thousands of consumers through manipulation of the software thus saving them money.

How do these software programs reduce insurance payouts?

According to the report entitled “Low Ball: An Insider’s Look at How Insurers Can Manipulate Computerized Systems to Broadly Underpay Injury Claims,” The programs perform the following actions for insurance companies:

  • Selectively eliminates higher cost claims from the data set used to determine the acceptable range of payments for a specific injury.

  • Cuts payments by a predetermined amount for each insurance holder.

  • Utilizes insurance adjusters who have no medical training and do not possess the proper credentials needed to argue with a medical professional’s findings. This often results in a lower payout for various injuries.

  • Encourages insurance adjusters to find drivers at least partly at fault for any accident that injured them.

Call Our Experienced Law Team Today

If you or someone you love has been affected by underpaid insurance claims, call Tampa injury attorney Abrahamson & Uiterwyk at 1-800-753-5203 for a free initial consultation.