Study Finds Insurance Software Used To Support Underpayment Of Injury Claims.

by Friedman & Ranzenhofer, PC on July 13, 2012

in NY Insurance Issues

Nearly all Buffalo personal injury lawsuits involve the injured party seeking payment from insurance companies.  Over the past fifteen years or so, many home and auto insurance providers have begun using injury evaluation software in the process of determining payments to the injured party.  A recent study by the Consumer Federation of America has found that this software has, in fact, allowed insurance companies to manipulate claim payments and reduce payments to injured customers.

The study found that this software allows insurers to reclassify injuries as being less serious than stated by the injured person’s physicians and to adjust other payment parameters, resulting in savings to the insurance provider at the expense of the injured party.  Some insurers have reported reduced overall payments of up to 20% upon shifting from the use of human adjusters to the use of software.

In response to the study, the American Insurance Association has stated that the purpose of the software is to provide consistency to payments – not reduce payments – and that most insurers do not rely solely upon the results given by the software when assessing the severity of injuries and determining payouts. 

The insurance claims software business is largely unregulated, and – based upon its findings – the Consumer Federation of America has called for state insurance regulators to investigate the software vendors and insurers for potential unfair settlement of claims following a personal injury.

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