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CNN’s Anderson Cooper investigates the nation’s biggest auto insurance companies

Automobile accidents are sometimes unavoidable, but luckily insured Americans have auto insurance companies to protect them. Right? Wrong. Anderson Cooper’s recently aired program exposed that some accident victims are being forced to settle or go to court because their valid claims are denied.

One automobile accident victim had been sideswiped and afterwards suffered from upper back pain and a damaged spine. To treat it, she saw chiropractors, physical therapists, massage therapists, and had acupuncture treatment. As you can imagine, the medical bills racked up, but one would believe that insurance would cover it. However, Allstate only offered the victim a “take it or leave it offer” of $15,000 for her car, her medical bills, and everything.

During an 18-month investigation, CNN discovered that minor accident victims barely receive a fraction of their expenses from the automobile insurance companies. Allstate has gone to great lengths to keep their real motive of pure profit secret. In some states, Allstate has defied judicial orders to make the documents public. Allstate’s strategy was to take valid claims and pay pennies on the dollar.

One woman, a former Allstate claims agent, states that she was trained by Allstate to treat most minor accident victims as frauds and offer them as little as possible. Allstate’s strategy boiled down to the three D’s: A position of delay; a position of denying a claim; and then ultimately defending the claim that they denied.

In court, Allstate and other major insurance companies strategize to make the claims so expensive and time-consuming to litigate that most automobile accident attorneys will not take the cases.

Profit margins continue to expand for automobile insurance companies. As long as the public allows this to occur, the insurance companies will get richer and people will not get a fair and reasonable settlement. Anderson Cooper stated that one would think that will all the savings and profits that the insurance industry is getting, drivers would get lower premiums. However, the Insurance Information Institute says that auto insurance rates have actually gone up 30% over the 10 years since this new type of insurance claim policy went into effect.

For the full transcript.