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Hagens Berman: Allstate and First National Accused of Cheating Consumers out of Thousands on Wrecked Vehicles | Business Wire


SEATTLE–(BUSINESS WIRE)–Two new class-action

lawsuits accuse Allstate Insurance Company and First National Insurance

Company of America (a Safeco company), of deliberately reducing the

value of vehicles in total loss insurance claims, using phoney data to

reduce the claim payments to consumers “by hundreds or thousands of

dollars,” according to Hagens Berman. Attorneys say other auto insurance

providers are likely engaging in the same fraud.

If you wrecked your car and your insurer bought it from you, your

insurer may have underpaid you by thousands. Find

out more about the lawsuit and sign up here.

The lawsuits accuse Allstate and First National of underpaying consumers

by manipulating the data used to value the cars. The suits were filed

Apr. 18, 2018, in the U.S. District Court for the Western District of

Washington. Say the two auto insurance companies flagrantly violated

state laws regulating the handling of these claims and making it even

tougher for vulnerable insureds whose cars were destroyed. Plaintiffs

Cecilia Palao-Vargas and Jeff Olberg allege that Allstate underpaid them

by at least $684 and $775 for their wrecked Hyundai Sonata and Ford

Fusion. Cameron Lundquist alleges that after he totalled his Dodge Ram,

First National shaved almost $1000 off his claim.

Specifically, the lawsuits say Allstate and First National use what they

call “condition adjustments” to reduce the value of comparable vehicles

without itemizing or explaining the basis for the adjustment as required

by Washington law. The complaints describe a “uniform ‘condition

adjustment’ to multiple comparable vehicles involved in a valuation

without even distinguishing one vehicle from the next.” The suit also

accuses Allstate of valuing the wrecked cars by comparing them to “grey

market” vehicles—vehicles manufactured for use in foreign countries and

often worth less than those produced for the U.S.

“These arbitrary and unjustified condition adjustments artificially and

improperly reduce claim payments by hundreds or thousands of dollars,”

the suit reads.

“Consumers who just had their car wrecked in a major accident are in a

tough spot—they need their insurance money to get back on the road and

get back to their lives. When insurance companies work to shortchange

them instead of protecting them, that’s just wrong,” said Steve Berman,

managing partner of Hagens Berman. “Other insurance companies are doing

it too,” he added.

Both auto insurance companies promise their customers they'll pay the

“actual cash value” of the vehicle or a comparable vehicle, according to

the lawsuits.

Berman, a nationally renowned lawyer for the three named plaintiffs,

seeks to represent anyone who's insured under automobile insurance

policies issued in Washington whose claim valuations were based upon the

values of comparable vehicles reduced by artificial, unexplained

“condition adjustments,” or didn’t get paid in full for the sales tax,

registration fees. Licence plate charges that'd arise if they

bought a new car.


out more about the class-action lawsuit on behalf of those who have

suffered a total loss collision and had their claims undervalued.


Hagens Berman

Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law

firm with 11 offices across the country. The firm has been named to the

National Law Journal’s Plaintiffs’ Hot List eight times. More about the

law firm and its successes can be found at https://www.hbsslaw.com.

Follow the firm for updates and news at @ClassActionLaw.

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