When Colossus and Xactimate are not exact: how computerized claims adjusting software has not changed the landscape of insurance litigation

The insurance claim adjusting process – the process by which an insurance company decides how much it will pay on a claim – is moving from a pen-and-paper task to a computer automated system. Computerized claims adjusting software is very efficient, but is not very transparent, and this mystifying process has created new legal concerns among plaintiffs' lawyers and claims adjusters. This article demonstrates how traditional legal claims can be strengthened by this move to a computerized regime. Rather than trying to find inventive new claims or procedures for bringing their claims, potential plaintiffs should look to the ways in which an automated system can improve their claims for bad faith insurance adjusting or unfair trade practices. Although many insurance companies have begun using the same adjusting software, plaintiffs' claims are not appropriate for an antitrust action and cannot be brought as a class action. Although technology has made this seem like a modern problem, this article finds that established law is well suited to handle plaintiffs' complaints.