Allstate Offers Lowball Settlements for Total Loss Claims, Class Action Alleges

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A proposed class action out of Arkansas alleges that Allstate Insurance Company systematically undervalues cash settlements for total loss claims by using an unauthorized valuation method, in violation of customer contracts and state law.

According to the lawsuit, rather than properly basing its estimates on comparable vehicles in the local market or using quotes from multiple qualified appraisers, Allstate uses CCC One market valuation reports to assess the cash value of vehicles declared to be total losses. CCC One is not a qualified dealer or appraiser, the case says, and markets itself to insurance companies by promising to reduce the cost of total value settlements. The reports allegedly improperly determine car values based on comparable vehicles outside of local markets and make a “series of arbitrary and unexplained adjustments” to the total value calculation that ultimately result in lowball settlements from Allstate.

By using this unauthorized method for determining cash values, Allstate saves “millions of dollars each year at the expense of its insured motorists,” the suit charges.