How,the,insurance,industry,sho law How the insurance industry shortchanges accident victims to

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Recently discovered secret documents held by Allstate Insurance Company show how the company purposely shortchanged legitimate claims to reap billions more in profits.The documents were created by a business consulting firm hired by Allstate in the early 1990's. The firm, McKinsey and Company, recommended that Allstate adopt a policy to intentionally pay out less money to accident victims who filed legitimate claims. Although the claims filed by accident victims were clearly valid and involved legitimate injuries, Allstate found that by intentionally undercutting the value of the claim by 20, 30 or even 50%, Allstate could earn much more in profits. This policy was revolutionary in the industry since no other company adopted a specific policy of intentionally undercutting valid claims and forcing people to file lawsuits unnecessarily.Allstate soon learned that the policy urged by McKinsey would help them reap billions more in revenue. Allstate found that most accident victims would not fight the policy by hiring an attorney and filing a lawsuit. Most victims would simply accept Allstate's lowball offer, even if begrudgingly and with animosity towards the company. Allstate realized that when the company settled thousands of claims at a 10, 20, 30 and sometimes 50% discount, it meant the company could recover literally billions more in profits. Given the numbers involved, it is very easy to see how Allstate could reap a windfall, albeit at the expense and disadvantage of legitimate accident victims.The consulting firm of McKinsey and Company is located in New York. The documents created by McKinsey and utilized by Allstate are now known as the "McKinsey documents." These documents have been requested in many lawsuits filed against Allstate across the nation. Allstate has vigorously contested releasing these documents. In one case Allstate has violated a court order by refusing to release the documents. The judge was not pleased and thereafter fined Allstate $25,000 for each day that it refused to comply. Allstate has appealed that ruling.When other carriers learned about the astronomical profits Allstate was earning from its new "business model," many of them followed suit including State Farm, Farmers and Safeco. The model essentially turned the insurance industry upside down on its head as far as the ability to earn more in profits without having to sell more insurance policies or without having to raise premiums.I have experienced Allstate's "business model" first hand in dozens of cases that I have handled for injury victims over the years. The model is now used by several other insurance companies who do business in Washington state. These insurance companies have a specific goal to make it as expensive and time consuming as possible for accident victims to recover fair compensation for their injuries. With this goal in mind, many times accident victims will not even receive an amount sufficient to cover all of the medical bills. The backlash has resulted in more lawsuits which clog our justice system and are a tremendous strain on our limited resources.Seattle's King 5 TV investigated Allstate's practices and interviewed some accident victims who have encountered the unfair settlement practices utilized by Allstate and other carriers.In Washington State, a new law was adopted by the legislature to protect accident victims who encounter the hard-ball tactics employed by Allstate's new business model. This law was then appealed by the insurance industry and petitioned as Referendum 67 which is up for a vote this November. The insurance industry has spent more than $8 Million to defeat Referendum 67.The Washington State Insurance Commissioner has publicly voiced support for Referendum 67. Many Washington newspapers have also endorsed the passage of Referendum 67 including The Seattle Post Intelligencer, The Olympian, The Everett Herald, and the Tacoma Tribune.Referendum 67 needs to become law to combat the unfair settlement practices utilized by the carriers who purposely undercut and devalue legitimate claims. Without Referendum 67 insurance companies like Allstate will continue to earn billions more in profits at the expense of legitimate accident victims. Article Tags: Earn Billions More, Insurance Industry, Accident Victims, Earn Billions, Billions More, Legitimate Claims, Business Model, Insurance Companies, Washington State