In April of 1998 North Carolina State Bar Issued a Letter of Caution to Allstate
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In April of 1998 The North Carolina State Bar determined that Allstate Insurance Company engaged in the unauthorized practice of law when it sent a letter to motorists who have had accidents with Allstate policy holders.
As a result, the Authorized Practice Committee of the North Carolina State Bar issued a letter of caution to Allstate in April of 1998.
Since Allstate did not like the results of the State Bar action, it asked the Authorized Practice Committee to reconsider its letter of caution in October of 1998 after Allstate alleged that it revised its materials.
The Authorize Practice Committee of the North Carolina State Bar declined to to reconsider its decision and the letter of caution still stands.
As a result of the action of the North Carolina State Bar Allstate did change this tactic as it relates to communicating with personal injury claimants
The letter sent to individuals who may have claims against Allstate insurance policies, informs them that Allstate will help them determine whether they are “eligible to receive compensation for any injuries” they may have suffered. Allstate also offers “to discuss fair payment of your claim.”
The complaint against Allstate pointed out that the recipients get the misleading impression that Allstate is on their side and that there is no benefit in getting an attorney to help. In discussing the “fair payment of your claim” Allstate was offering assistance in the evaluation of a claim for an injured party.
The complaint stated further that the letter not only violated the practice of law but was a clear violation of the conflict of interest rules. Allstate’s interest was in not paying anything to the injured party. The interest of the injured party on the other hand is to recover as much as possible for his claim. Obviously, those two interests conflict with each other. It would be impossible for Allstate to protect the interest of the injured party and at the same time also protect the interest of its shareholders.
The State Bar agreed and took the appropriate action to stop the letters from being sent. Three other States, West Virginia, New York and New Jersey, have previously taken similar action against Allstate.
A 1994 study by the Insurance Research Council showed that people with lawyers on the average got three times more in a settlement.
If you or a love one are tempted to deal directly with an insurance claims adjuster concerning the settlement of a personal injury claim, please keep in mind that the adjuster is not acting in your best interest. The law requires that the adjuster protect the interest of the stockholder not yours.