Personal Injury Law

Allstate Underhanded Settlement Tactics and Claims Handling - At Fault Driver Filing Bankruptcy does not Preclude Claim

By Benjamin J. Sansone, Esq.

Do a simple Google search on Allstate and deceptive or any other similar word and you will find countless articles about their deceptive claims practices that are in direct conflict of their advertised public image of being in "Good Hands". Ask any injury lawyer or most individuals that have had to make an insurance claim involving Allstate to describe if they felt they were in "Good Hands" and they will describe an experience probably closer to the experience against the fictional Great Benefit insurance company in the legal drama the Rainmaker.

I have to deal with Allstate on a regular basis as a Missouri injury lawyer based in St Louis, and there is no doubt they are the most difficult insurance company to deal with as they have a deny, deny, deny attitude towards just about every claim. Whether you are making a claim against an insured of Allstate or you yourself are insured by Allstate and making a claim against them for a loss, trust me, the "Good Hands" turn into boxing gloves very quickly.

Allstate reached a new low in a recent settlement tactic they tried on one of my clients. She was severely injured as the result of a car accident when a high speed drunk driver, insured by Allstate, slammed into the rear of her vehicle as she was waiting at a red light in Belleville Illinois. The drunk driver has a policy limit with Allstate of $100,000; however, despite my client's severe injuries and the gross negligence and recklessness on behalf of Allstate's drunk insured, they have offered less than half of the policy limits. So we filed a lawsuit and Allstate's shady settlement tactic was that after we filed a lawsuit, the at fault driver, through Allstate's lawyers, threatened filing bankruptcy unless my client settled for the above mentioned low offer. Essentially, saying you better take this low offer we have made or you get nothing.

Does bankruptcy preclude an injured victim from recovering? In most cases NO. Even if a negligent driver files bankruptcy, this does not preclude the injured victim to the insurance coverage carried by the driver when the accident occurred. Therefore, in the above case, even if the driver files bankruptcy and it is granted, my client can still recover up to the $100,000 insurance policy. Moreover, any judgment or settlement arising from the injuries of a drunk driving accident are not dischargeable in bankruptcy. Bankruptcy court does not let someone get out of a debt incurred as a result of their intentional or reckless conduct, such as a drunk driving accident. Therefore, this debt would not be dischargeable in bankruptcy and Allstate know it. However, it is a tactic that is very influential on a non-lawyer or a lawyer not familiar with the bankruptcy court.

Our response to Allstate, we called them out, demanded policy limits or we will pursue a judgment in excess of the policy limits and punitive damages against their insured (likely making him personally liable beyond his insurance coverage for their refusal to pay). Now, if you were Allstate's insured in this case, would you feel as if you were in "Good Hands"?

Full post as published by Missouri Injury Law Blog on February 16, 2008 (boomark / email).