Safeco and Liberty Mutual Claims Practices Questioned on a National Basis: Policyholders Organize Against Wrongful Claims Practices
Suppose you knew that your insurance company had started a new claims practice program called “Quantum Leap” to increase corporate practices by making certain no claim was overpaid—would you buy that insurance? Would you feel peace of mine if you knew that secret program was in place and had such a claims philosophy?
Chances are that if such a claims program were in place and advertised to potential purchasers, nobody would buy from that insurance company. Revenues would drop and losses would incur. So, when Safeco Insurance Company started on such a claims program to increase overall corporate profits, do you think the Safeco executives wrote their customers, agents, and potential purchasers about such a program if it were really in the customer’s interest as well? Of course not. But, this is exactly what happened at Safeco.
Last year, Liberty Mutual Insurance Company purchased Safeco Insurance Company. After doing due diligence, the managers and executives at Liberty Mutual knew that Safeco’s claims philosophies fit within Liberty Mutual’s. Liberty Mutual had its own claims payment reduction programs as well. Similar to Allstate, Liberty Mutual hired outside claims consultants to develop claims philosophies that added to corporate profit through claims reduction programs. The purchase of Safeco Insurance Company by Liberty Mutual Insurance Company is a match made in heaven for the short term investors of Liberty Mutual and the executives of those companies.
Our firm has been retained on a number of property insurance disputes involving these companies. As a result of my involvement in one particular matter where I have received no response from Safeco, I have decided to do something about these companies claims problems in the same manner I approached Allstate Insurance Company when I was chair of the Bad Faith Litigation Group for two years in the mid 1990s and Allstate was underpaying claims based upon its wrongful claims program known as Claims Core Process Redesign. I will help organize a cooperative effort of those that have been victimized by these companies to publicly warn other consumers of these companies’ claims practices and raise knowledge with regulators interested helping insurance customer interests.
While Chair of the Bad Faith Litigation Group, I presented numerous seminars regarding Allstate’s claims practices. An example is my 1997 presentation to the Montana Trial Lawyers Association, “Overcoming Allstate's Trade Secrets and Work Product Objections.” The results of these networking activities regarding Allstate were documented in part on previous posts:
- "Deal, or No Deal?"
- The Good Hands Gets the Iron Fist
- Ed Liddy
- David Berardinelli's Fight Against Allstate's Claims Culture
- Allstate Does the Right Thing
- Allstate Testifies Today
- States Seek McKinsey Reports
My intention is to create similar networking and transparency with Safeco and Liberty Mutual and share the 150,000 internal documents we have already collected regarding the secret claims practices of these companies. In this manner, other victimized policyholders will not suffer the similar consequences without understanding why the claims programs were not isolated just to them and the real motive for the delays and denials by Safeco and Liberty Mutual. Possibly, executives at Liberty Mutual will stop these practices and do right to their customers. If not, at least brokers and customers will know what Safeco and Liberty Mutual are about when it comes time to pay fully and promptly following a loss.
On December 17, 2009, our firm with other consumer law firms will host a claims practice seminar in Houston that will focus on Hurricane Ike claims practices as well as Safeco and Liberty Mutual claims practices. Computerized legal databases now allow us to find all federal and most state lawsuits against Safeco and Liberty Mutual which involve property insurance or bad faith lawsuits. Those attorneys representing the policyholders will start getting their invitations today.
Websites about Safeco and Liberty Mutual along with Facebook sites will be up and running by next week so claims practice information may be shared among consumers, whistleblowers, and victims of these insurance companies. Honest and trustworthy insurance companies should applaud our efforts because companies that cheat on claims should not be allowed to gain market share by having lower rates by such practices than those that fully and promptly pay their claims.
I have recently handled a LMIC claim where the emergency service provider (dispatched by LMIC) wrote an initial estimate and Liberty sent the insured a check (just slightly over deductible) putting their cover letter over the estimate.
I am then signed to represent. We file for appraisal and LMIC asks for inspection. We grant and LMIC sends an Independent Adjuster who then writes a reasonable estimate, but not exactly full.
I file for appraisal. LMIC says they will offer more, but wants insured to sign release. Insured needs money as they are working family, no cash reserves to fund their work. They say ok, lets settle and take the money so we can make some of the repairs.
The release does exactly what you expect the release to do, absolve LMIC of anything.
Do you need this file?
Richard,
Yes, thank you.
One of the ways I go about trying to find general practices of wrongful claims conduct is to have myself and our investigators meet with public adjusters regarding certain insurance carriers. Once you start going through numerous files of the same carrier, certain patterns can be investigated and followed up with.
I encourage anybody with those instances of misconduct to follow up and have the complaint documented.
It is a small world to find this report.
We just found out this week that Safeco is blaming my son for an accident that was not his fault according to the police report, eyewitness, and he had no tickets given but the other driver did. The other driver was also driving on a 3 time revoked license and no insurance going about trouble the speed limit.
Can you help us with this matter since you are aware of Safeco's policy already?
I have a claim with LMIC where they have not completely paid everything that their adjuster included in his estimate. Adding up what they say was due to the insured and then taking away what they have actually paid is off by about 5k.
I have a long list of calls and letters sent regarding this matter with no response. Let me know if this is something you would like more information on.
last year my house caught on fire and liberty mutual has refused to pay invoking appraisal within one month without ever properly presenting or looking over the claim. detectives, police, and their own cause and effect engineer say we had no fault in the fire yet they have repeatedly used stall tactis this past year saying they didnt recieve reciepts or informaiton that i have fax verification showing successful and then later admitting they had it the whole time "this is what we already had" while they have had beds to sleep in and warm food on the table they have left me and my four kids homeless sleeping on the cold hard floor of one of the rooms that caught on fire spending more money for detectives and fighting the claim than if they had paid and now because the adjuster that invoked appraisal found out the umpire sided more towards me and my children they are arguing his decision and they selected him. dss is about to take my kids due to the living conditions and everyone is dragging their feet..what can be done??
I was going to sign up with Safeco Mutual Ins. Are you saying that this would be bad as far as fast and fare payouts?
I need to know right away as my insurance is due.
I represent a husband and wife whose next-door neighbor owned a pit-bull who jumped to the top of the backyard fence and bit the husband's face, destroying his left eye. Safeco claimed no coverage and we proceeded to obtain a judgment after trial by jury of $744,000 in emotional distress damages. I will be filing a third party bad faith action next week and would appreciate any information which might be helpful as to any other awards or information regarding claims practices in similar premises liability cases.