Attorney: You're in bad hands with Allstate

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BY KEN KOSKY
kkosky@nwitimes.com
219.548.4354 | Tuesday, April 08, 2008 | (5 comment(s))

Attorney Kenneth J. Allen -- who helped a Valparaiso man win a $20 million verdict against Allstate insurance company in 2006 -- said at the time that Allstate acts in bad faith by making policyholders choose between a poor settlement or a long, drawn out legal fight.

Allen said the company's "scheme" to divert money from policyholders to shareholders will be out in the open now that the company was forced into publicly releasing the "McKinsey Documents." The documents include 150,000 pages of records detailing the plan Allstate implemented in 1995 to increase profits by reducing claims payouts, Allen said.

Allen said a Florida appellate court upheld the suspension of Allstate's license in the state for refusing to provide the McKinsey Documents to Florida's insurance commissioner. Rather than lose its business in Florida, Allstate then released the documents, Allen said.

Allstate spokesman Mike Siemienas said the documents were not released due to the Florida decision, but rather for several reasons, including the need to address misunderstandings.

Siemienas said trial lawyers, who have a vested interest in painting Allstate in a negative light, do so by taking snippets of the documents out of context. He said Allstate settled millions of claims last year and earned high rates of policy renewal.

"We pay the appropriate amount in a timely manner," Siemienas said.

Allen, however, said insurers traditionally pay out 70 cents on the dollar for claims, but Allstate began paying 52 cents on the dollar to return millions to shareholders.

Allen said the client for whom he won $20 million, Ted K. Fields, suffered spinal injuries in a 1995 crash. After the insolvency of the insurer for the person who caused the crash, Allstate became responsible under the uninsured motorist coverage it sold Fields.

Fields suffered $7,000 in medical bills and $18,000 in lost wages, but Allen said Allstate forced Fields into a nearly 10-year battle. Allen said many people yield to Allstate's tactics, but Fields would not.

Allen said a doctor and psychiatrist testified during the two-week trial that the stress caused by Allstate's actions contributed to Fields' rise in blood pressure, which led to heart problems and a stroke.

"Allstate's misconduct in dragging out the Fields' claims followed the McKinsey plan to the letter," Allen said.

The $20 million awarded to Fields by a Lake County jury was appealed by Allstate, but Allen expects a decision on the appeal within 30 days.

Siemienas said there was a case against Allstate in Kentucky in which the McKinsey Documents were presented in context and the jury found in favor of Allstate. He said Allstate was justified in fighting the release of the 150,000 pages of documents because they contain trade secrets, and he said they also contain ideas never implemented.

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zellie wrote on Apr 28, 2008 7:03 PM:

" read the case..guy had insurance for 10 yrs. w/no claims., when he filed a his claim with Allstate for just his policy limits. Guess they not only refused to pay for his injuries, his lost pay or his totalled car BUT they went to court and joined sides WITH THE OTHER DRIVER. There's a lot out there on this case and frankly it's appalling. Guess everyone's insurance is fine--until you need it. "

mp3 wrote on Apr 11, 2008 10:46 PM:

" Sounds like to me someone was under insuring themselves. if their policy limits where higher he might have had the liability to cover himself. do not carry state minimums cause you could be caught in a jam yourself.
Insurance companies will be around forever.
The state makes you insure your car.
lenders make you insure your home.
100/300/100 you know the numbers call your insurance company and find out what they mean to you. "

Allstate Customer wrote on Apr 8, 2008 6:57 PM:

" I've had allstate for 20 years. They've always done me right... but then again, i've never had a huge claim, thank God... I tell you who the real crooks are in this country, the health insurance companies. They take and take and take, but then when it's time to give, they find any excuse to deny you. They know most people don't have the means to fight back. "

Unbiased Observer wrote on Apr 8, 2008 3:45 PM:

" People don't seem to mind insurance companies when their loved ones die early or their houses burn or they get into car accidents. It seems to me that people willingly take their money then. When have you ever received money from a lawyer? "

INsurance Co. vs. Lawyers wrote on Apr 8, 2008 9:05 AM:

" Insurance companies and Attorneys. Both are necessary evils but I dislike insurance companies way more than lawyers. They are both opportunistic cheats but without lawyers, insurance companies would be even worse. "

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