Michigan residents injured in auto accidents beware of Auto Insurance tactics.
According to the sworn testimony of a representative of State Farm Insurance it appears that the company paid millions of dollars to a consulting firm to analyze and modify its claims handling practices in the mid 90s. According to the recent testimony of former State Farm employee Robert Butler in the case of Armisted v. State Farm (No. 2:07-cv-10259, Hon. Arthur J. Tarnow) in the US District Court in Detroit, State Farm implemented the ACE program. An integral part of this program was to “capture opportunities.” Those “opportunities” happened to include the indemnity payments made to people who were insured by State Farm in Michigan when they were injured in a car accident. State Farm determined that there was the opportunity to capture millions of dollars annually in payments for PIP benefits.
Mr. Butler confirmed during his testimony that State Farm determined that it was settling too many cases. Accordingly, it appears to this writer that State Farm then decided that more claims should be forced into litigation in order for State Farm to “capture” the potential “opportunities.” In Michigan alone State Farm concluded the potential “opportunity” included about $30 million dollars a year in indemnity payments. Mr. Butler confirmed that the ACE program was a nationwide initiative.
The secret internal documents that State Farm was forced to produce in the litigation included a description of tactics to cause delays in paying claims, and hidden agenda tactics including the “surprise”, the “silence”, the “fake out”, the “go for broke”, and also the use of “absent authority tactics” to “pass the buck”- an effective technique to say you have no authority to deal with a claim.
This is another prime example of an insurance company putting the bottom line over the importance of the little people who may be injured and in need of benefits.