Home > Business Disputes > Allstate Insurance — Good hands drop insured in the Grease

Allstate Insurance — Good hands drop insured in the Grease

Allstate spends millions and millions of dollars in advertising to convince people that they are there for them when they are needed. The good hands people. My experience is that Allstate continually denies or undervalues valid claims which results in their insured being sued. If that is not bad enough, many times they file answers which deny facts that their own insured later admits in their sworn testimony. The sad part is that this is so common that most attorneys are not even surprised at the tactic. This action not only results in their insured being sued for an accident which everyone knows was their fault, causing them to miss work and go through the stress of litigation but can result in the Allstate insured potentially being personally liable for a large verdict in excess of the policy limits. That is exactly what happened in Houston this week.
A young girl was hit by a man who ran a red light. He was insured by Allstate. The police listed him as the cause of the crash. She had over $16k in past medical and needed additional medical care which would cost $22,500.00 which was undisputed. The Allstate insured only had $25,000.00 in insurance coverage which the girl offered to accept. Allstate refused. Their insured gets sued, has to answer discovery, give a deposition, miss work and stress over this lawsuit. The day the trial is to start the lawyer for the young girl offers again to settle for the policy limits which would not only end the lawsuit, but protect the Allstate insured from any risk of an excess verdict. You would think they would jump at the chance to settle and protect their insured. That is why we pay premiums and they are the “good hands” company. Allstate instead choose to offer $12,500.00, which was refused. Jump to the next day, the jury returns and find the man 100% at fault and a verdict against in for $202,942.70. Now he faces the possibility of being personally liable for almost $200,000.00 all because Allstate decided to refuse to settle a claim that anyone who has any sense knew they owed. If you are in a wreck, never assume that your insurance company is going to do what is in your best interest. Require them to copy you on all letters and offers. In the last few years we have had more and more situations in which we have represented the insureds personally to make sure the insurance company did what they should to protect their insured. Will Allstate take notice and begin to fairly evaluate claims to protect their insureds from being sued? I doubt it. Based upon their history, I would expect them to just increase the advertising budget, blame the juries, judges and lawyers. Anything but take responsibility. Why should they when they can just drop their insured in the grease. Let me know your comments.

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  1. John Naughton
    August 1, 2009 at 8:29 pm

    Brent,

    Could a state law be written to stop that IC practice? With that judgement of $200K doesn’t the IC still have to pay the $25K?

    • carpentercarpenter
      August 1, 2009 at 8:53 pm

      Yes, unfortunately most states had such laws (bad faith) but they were done away with in tort reform. The insurance company is responsible for the policy limits but in addition to the judgment there is also interest and costs.

  2. Carl Duke
    August 18, 2009 at 3:07 am

    I believe “Tort Reform” is a misnomer for what more appropriately should be called protectionism of certain economic entities from suit in tort. Same old story: “He that has the Gold makes the Rules.”

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