What Is Colossus Claims Software?

When disaster strikes, most vehicle owners have insurance policies in place to cover any unexpected expenses or repairs. However, getting an insurance provider to act in good faith for their part of the agreement may be a challenge—especially when your car accident claim isn’t even handled by a human being but, rather, by automated software that may cheat you out of your well-deserved compensation.

According to multiple reports and class action lawsuits, many major insurance providers send policyholders’ claims through a system designed to shortchange paying customers on the financial protection that they need and deserve during challenging times. The most commonly used software for such bad-faith practices is the industry’s best-kept secret, Colossus insurance software.

As an insurance policyholder, you deserve to get the coverage you paid for. If you have had a claim denied or shortchanged by your provider, contact Morgan & Morgan today for a free, no-obligation case evaluation. We can discuss your legal options and may be able to help you fight for full and fair compensation.

What Is Colossus Insurance Software?

Colossus claims software is an artificial intelligence (or AI) software program used by insurance companies to evaluate the value of a claim. It employs algorithms and complex calculations to assess the severity of injuries, treatment costs, and other factors to determine the settlement amount. 

While many insurance companies would describe the intention behind implementing such software as a way to streamline the claims process, in actuality, Colossus can be used to reduce the compensation that an accident victim receives by up to 20%.

That’s right. Adjusters can set Colossus to intentionally underpay claims, typically by 12-20%. This is the primary way the software can save an insurance company money. This intentional underpayment of claims is often considered “bad faith,” or failure to fairly, promptly, and reasonably settle a valid claim.

How Does Colossus Work?

Insurance companies can simply input the “savings” they want into Colossus, and the software will work toward that result. If an insurance company wants higher profits, they can tell Colossus how high they want profits to increase, and Colossus can squeeze it out of the settlements paid to accident victims.

Colossus works by generating “low” and “high” values for a particular claim. For example, Colossus may generate a “low” value for a claim of $8,000 and a “high” value for another at $10,000. It’s important to note, however, that even the “high” value is lower than it should be because Colossus has figured in the savings amount set by the insurance company. 

Claims adjusters then uses these “low” and “high” values to try to settle your case within that range. Critics argue that the software's calculations may favor the interests of insurance companies, leading to lower-than-needed settlement offers. Some also believe that Colossus may undervalue injuries, downplay the impact on an individual's life, or fail to account for long-term consequences adequately. This can leave policyholders feeling cheated and receiving less compensation than they deserve.

What Factors Influence Colossus About My Settlement?

The Colossus claims software reviews data collected from your medical records and assigns “severity points” to your injuries. There are over 600 injury codes in Colossus. Severity points are used to denote an injury’s severity and will multiply the amount of money Colossus will offer.

Some findings in your medical records that may increase settlement offers include:

• muscle spasms
• dizziness
• radiating pain
• headaches
• restriction of movement
• nausea
• vision impairment
• neurosis
• depression
• anxiety

These are known as “value drivers” by the insurance companies. Colossus will also take into consideration whether you were hospitalized for your injuries, the type and length of medical treatment, any medication or physical therapy administered, and the severity of your impairment.

Who Owns Colossus Software?

Insurance giant Allstate was the first to implement the Colossus insurance software evaluation model, developed and licensed by the Continuum Company (now a subsidiary of the Computer Sciences Corporation) in the 1990s. Before that, real-life adjusters were responsible for reviewing and assigning the value of each and every claim. Presently, most claims are processed by software that evaluates the claims and tells the adjusters what to decide.

Today, Continuum is one of the largest computer service corporations in America.

Who Uses Colossus?

The following insurance companies are known to use the Colossus claims software:

• Aetna
• Allstate Insurance
• American Family Mutual Insurance
• American National Property and Casualty
• American Family Group of Madison
• Arrow Claims Management
• AXA Insurance
• Bishopgate Insurance
• California State Automobile Assn.
• CNA
• Encompass (owned by Allstate)
• Esurance (owned by Allstate)
• Explorer Insurance Company
• Erie Insurance
• Farmers Insurance
• Federated Insurance Group
• General Casualty Insurance Company
• Great American Insurance Company
• Grange Mutual Casualty
• Keystone Insurance
• Liability Line Insurance
• Metropolitan Group
• Motorist Mutual
• Ohio Casualty
• The Hartford
• MetLife Home and Auto
• State Auto
• St. Paul Insurance
• Travelers Property Casualty Insurance
• USAA
• Utica
• Westfield Insurance
• Zurich

Does Progressive Use Colossus?

Some insurance providers, such as Progressive or Liberty Mutual, have not been confirmed to use Colossus, but they are known to use a similar software known as Claims Outcome Advisor (COA).

Have There Been Colossus Lawsuits?

Consumer advocates have struck back at the big insurance companies using Colossus, including Allstate. 

Following an investigation by 47 states, Allstate entered into an agreement with the National Association of Insurance Commissioners, wherein the insurer agreed to pay $10 million toward a fund designed to monitor computerized claims handling practices, agreed not to pay incentives to claims adjusters who settle injury claims within Colossus’ acceptable range, and agreed to tell accident victims it uses Colossus with the following disclosure:

“One of the tools that our claim personnel may use in evaluating the claim is a computer program known as Colossus, licensed by Computer Sciences Corporation. Colossus uses a broad range of information about your injury, treatment, and prognosis to determine the severity of your injury. Based on this information, Colossus makes a recommendation as to the value of your injury. The Colossus recommendation is only one factor among many that our adjusters consider in reaching a decision as to the overall evaluation of the claim. It is their goal to reach that decision promptly, fairly, and based on an appropriate investigation of the facts and circumstances of your client’s claim.”

What Can I Do if My Claim Is Denied?

Find out if a computer program was used to evaluate your claim. 

If you were injured in an accident and filed a claim, be aware that Colossus insurance software or some other computerized system may have been used to calculate a significant part of the settlement offer you receive from the insurance company. 

You have a right to ask your insurer if Colossus or any computer system has been used to calculate your settlement offer. Allstate is required under the NAIC agreement to provide you with this information. Other insurance companies, however, are not.

Demand to see the range of results the computer generated.

If any insurer, including Allstate, refuses to show you the range, you can file a complaint with your state insurance department.

If the insurer does not agree to settle at the high end of the range, contact Morgan & Morgan.

Morgan & Morgan is the country’s largest personal injury law firm, and with a nationwide network of over 1,000 lawyers, Morgan & Morgan has an office near you. With over 35 years of experience, our law firm has recovered over $20 billion for our clients.

At Morgan & Morgan, we take every injury claim seriously, and when insurance companies act in bad faith, we are prepared to fight for justice—no matter how big an opponent there is.

Contact us today for a free, no-obligation case evaluation to learn more. We can help level the playing field and can help fight to ensure you are treated fairly throughout the claims process.