Allstate Settles 10-Year-Old Class-Action Suit

NU Online News Service, Aug. 19, 1:30 p.m. EDT

Allstate Insurance Company announced the proposed settlement of a nationwide class-action lawsuit alleging the company underpaid auto and homeowner injury claims.

Plaintiffs in the Strasen v. Allstate case alleged that Allstate utilized a computerized medical bill review system provided by ADP which failed to correctly calculate medical expenses from automobile and homeowner's claims, Allstate said.

The case had been pending in the Circuit Court of Madison County, Ill., for almost 10 years, Allstate said.

A notice describing the proposed agreement said plaintiffs sought a settlement because they recognized "the uncertainty and the risk of the outcome of any litigation, especially complex litigation such as this, and the difficulties and risks inherent in the trial of such an action."

The number of individuals in the class and the monies involved remain to be determined. According to the notice, "Class members who can submit a valid claim form shall, subject to the applicable policy limits, receive 60 percent of the difference between the amount of the bills submitted and the amount previously paid by Allstate…."

Allstate said while it has agreed to the settlement the company "has denied and continues to deny liability on each and every claim asserted by the plaintiffs."

Mike Siemienas, communication manager at Allstate, said, "Although confident in our position, Allstate was presented with an opportunity to resolve this case on terms that we consider to be fair and appropriate. By achieving this settlement, Allstate is able to avoid the burden and considerable expense of continued litigation. This is good for Allstate and its customers. Allstate believes its medical bill review practices are appropriate and fully comply with the law."