Senate Blasts Allstate and State Farm Insurance Companies for Bad Faith Claims Handling Practices

Senator Hawley of Missouri examining State Farm and Allstate Bad Faith Practices

Senators Hawley and Kim led a spirited hearing on Tuesday on Allstate and State Farm’s bad faith insurance claims practices. These hearings included testimony by Allstate and State Farm policyholders, claims executives, and two independent adjusters involved in the adjustment of an Allstate claim arising during Hurricane Helene.

Both policyholders complained that the insurers assigned and reassigned multiple adjusters, delayed in investigating and reinspecting their homes and minimized and excluded damages.

In addition, two licensed independent adjusters who worked for Allstate and State Farm criticized the two insurance companies for placing cost-cutting ahead of accurate claim handling, pressuring claims adjusters to down-code or leave out damage, and reassigning claims to adjusters who were willing to adjust claims in bad faith. They also discussed the practice of having estimates reviewed and altered by undisclosed individuals inside the company.

One of the adjusters went into great detail about how before 2020 Allstate used field adjusters to inspect a claim and write an estimate. After 2020, Allstate began using unlicensed vendors to takes pictures of the damage,  a desk adjuster inside the company to review the pictures and draft an estimate and then a reviewer to make changes to the estimate and make coverage decisions. This process is not explained to the policyholder.

Another adjuster discussed how State Farm and Allstate sought to reduce estimates of damages and reassigned claims to adjusters who were willing to reduce payments. He also discussed situations in which an insurance company representative asked him to change his finding of hail damage to a roof to a finding that the damage was due to “wear and tear” and was excluded. He testified about another incident in which the insurance company representative told him that a shingle was not wind damaged because it was creased.

Senator Hawley described these claims processes as deliberate attempts to minimize payouts while the insurance companies made billions in profits. For the video and transcripts of the prepared portion of the testimony click here.

If you have an Allstate or State Farm claim and believe that you have been a victim of some of the practices described above, contact us. We consistently investigate and litigate State Farm and Allstate claims.