These minor-impact automobile accidents happen every day. However, what many people do not realize is that the problems for the injured person do not end after the accident -- they are just beginning.
In an effort to reduce losses and increase profits, many large insurance companies deny and/or delay even the most straightforward of claims. CNN and Anderson Cooper conducted an 18-month investigation into minor-impact soft-tissue injury crashes around the country. What was discovered by reviewing documents and talking with former insurance industry employees was insurance companies systematically adopting a "take-it-or-leave-it" strategy when dealing these minor-impact soft-tissue injury crashes, even when liability is not an issue. This strategy was deemed "institutionalized bad faith" by University of Nevada insurance law professor Jeff Stempel. This strategy seems to have been developed in the mid-1990s and for insurance giants Allstate and State Farm, according to CNN, this strategy was developed with the assistance of consulting firm McKinsey & Co when looking for ways to boost profits. CNN noted that while these documents from McKinsey are under seal in courts around the country, they were able to view several of them during a court hearing in Lexington, Kentucky. One such document viewed by CNN played on Allstate's slogan "You're in Good Hands" by stating that the insurance company should put boxing gloves on those hands for claimants that insist on going to court.
As one former Allstate and State Farm employee stated to CNN, the strategy of these insurance giants relies on the three Ds -- denying a claim, delaying a settlement, and defending against the claim if it goes to court.
Read the articles by Anderson Cooper 360 regarding this investigation.
Insurance Companies Fight Paying Billions in Claims
Auto insurers play hardball in minor-crash claims
View the three part series which aired covered this investigation.