Allstate Insurance Co. Civil Trial Begins in Kentucky

A civil trial regarding Allstate Insurance Co.’s procedures for handling claims began in Fayette County Circuit Court this week.

Geneva Hager, of Richmond, Ky., filed a $1.425 billion civil lawsuit claiming the company’s procedures for handling claims violates state law.

Allstate, which is based in Northbrook, Ill., has denied the allegations.

Hager’s attorneys claim the insurance giant used various tactics to get people who file claims to accept unfair settlements. The lawsuit claims Allstate’s procedures violate the state’s Unfair Claims Settlement Practices Act, which requires insurance companies to offer fair settlements when liability is determined.

“Allstate is confident that it appropriately processed and settled Mrs. Hager’s claim,” company spokesman Mike Siemienas told the Lexington Herald-Leader in a written response.

Attorneys for Allstate have said its claim-handling process is aimed at finding fraudulent claims.

Fayette Circuit Judge Thomas Clark denied giving the case class-action status last November. Clark said in his ruling that Hager’s circumstances were too unique to represent a class of plaintiffs.

Hager’s attorneys were seeking $800 million in damages.

David Berardinelli, a New Mexico trial lawyer who wrote a book about Allstate’s claims practices, questioned the amount of damages being sought.

“That’s the worst thing they could do,” Berardinelli said. “That is a typical mistake a lot of these guys make, because then it looks like greed.”

But Golden has said the amount will be supported in court. The damages being sought include $475 million for compensatory and $950 million for punitive damages.

“And until the evidence is heard, no one should make up their mind,” Golden told the newspaper.

Hager was involved in a 1997 crash in which a vehicle insured by Allstate rear-ended the vehicle Hager was riding in and she suffered neck and back injuries. The insurance company paid Hager $25,000, but Hager’s attorneys argue it was only offered days after Clark set a trial date over her claim.

Information from: Lexington Herald-Leader,