Allstate Settles Bad Faith Claims in Washington

The Seattle Post-Intelligencer reports that Allstate Insurance Co. will now fairly compensate thousands of Washington drivers for out-of-pocket medical expenses in a class action settlement.

In 2005, Allstate was sued for arbitrarily limiting PIP payments for car accident victims. Allstate used Colossus to determine the average pay rate for a procedure in the geographical area and then paid out only 85 percent of what it found to be the average amount. To be clear, they did not pay what they thought was fair; they paid 85% of what they thought was fair. In an unrelated story, Allstate takes 100% of the premiums from their insured. This practice underscores the insurance company motto of taking premiums and denying claims.

If any of this sounds familiar to you, I blogged last week about a former Allstate employee’s testimony that revealed Allstate’s alleged systematic bad faith in a first party bad faith case in Kentucky.

I also blogged back in May about the newly strengthened first party bad faith bill that passed in Washington, which has much sharper teeth that Maryland’s new first party bad faith law, allowing for three times the actual damages incurred plus attorneys’ fees and expenses. I cannot help but wonder if that precipitated settlement in this Washington bad faith case.

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