How the Colossus Computer Program Estimates Accident Settlement Values

Learn how insurers use the Colossus program to value car accident cases, how it can be manipulated to produce unfair values, and what you and your lawyer can do to increase the chances of a fair valuation.

By , J.D. · University of San Francisco School of Law
Updated by Dan Ray, Attorney · University of Missouri–Kansas City School of Law

Colossus is a software program used by many of the top auto insurers to calculate settlement values for minor to moderate car accident injury claims. If you've been hurt in a car wreck and made an insurance claim within the last 25 years, chances are your claim was evaluated by Colossus—or a claim valuation program much like it.

The inner workings of Colossus—what it does and how—are still, more than 30 years after its creation, largely shrouded in secrecy. The companies that have owned and licensed the program guard this information as trade secrets. Neither they nor the insurance companies using the system have been willing to reveal much, except when they've been forced to in litigation. What little is known about Colossus has leaked out, mainly through former insurance adjusters.

Here's a summary of what's known, or widely believed to be known, about the software—the insurers that use it, how it works, ways it can be manipulated to undervalue claims, and how you and your lawyer can use it to get the best possible result in your case.

Who Owns and Uses Colossus?

Colossus was created in Australia in the mid- to late-1980s. Insurers there wanted to control insurance claim costs, meaning both settlement payouts and the costs of adjusting and resolving claims. In 1996, Computer Sciences Corporation (CSC) bought the company that owned Colossus. In 2017, CSC merged with a division of Hewlett Packard and created DXC Technology, the company that owns and licenses Colossus today.

It's hard to overstate the impact that Colossus has had in valuing and settling personal injury claims, in the United States and worldwide. Here's a partial list of large insurers that have reportedly used Colossus—presently or in the past—to value auto claims:

  • Aetna
  • Allstate
  • American Family
  • American National
  • CNA
  • Farmers
  • Federated
  • Great American
  • The Hartford
  • MetLife
  • St. Paul
  • Travelers
  • USAA, and
  • Zurich.

More than three dozen claims adjusting companies also use Colossus to review claims for over three hundred small insurance companies. Your own auto insurer probably uses Colossus or a program like it to resolve auto accident cases.

How Does Colossus Estimate the Settlement Value of a Case?

Colossus relies on data provided by an adjuster to calculate a range of values for a personal injury claim. The data Colossus uses can be grouped, broadly speaking, into two categories:

  • non-claim data, which includes information about your lawyer (if you have one) and the outcomes of similar claims in the area where you live, and
  • claim data, meaning information about your injury, the medical and other treatments you received, and your resulting disability (if any).

Keep in mind that the adjuster feeding Colossus this data is someone who works—directly or indirectly—for the insurance company. Their livelihood likely depends, at least to some degree, on keeping payouts within a range the company finds acceptable.

Non-Claim Data

Before it ever gets to the specifics of your claim, Colossus takes into consideration at least two key factors.

  • Your lawyer. That's right—Colossus knows about many of the lawyers in your area. It's looking for lawyers who will settle for the first offer that's put on the table, and for lawyers who don't mind filing a lawsuit and going to court. Needless to say, Colossus will recommend paying more to claimants with lawyers in the second group than those with lawyers in the first. If you're not represented by an attorney? Let's just say that Colossus sees you as an easy target.
  • Prior settlements in your area. Colossus is loaded with data about claim settlements from all over the country. When you show up with a claim, the program looks at what it's been told are similar claims in your area as a benchmark for the value of yours. Of course, the accuracy of this benchmark is only as good as the claims Colossus is told to consider. More on that later.

Claim Data

With that non-claim data safely tucked away, Colossus then turns to information about your claim. Most of this information comes from your medical records. Because your claim data depends on what's in your medical records, you're at the mercy of your treating doctors, nurses, and other staff. If they're thorough and conscientious about charting, that's likely a plus. If their recordkeeping is rushed and haphazard, Colossus won't have the information it needs to come up with a fair valuation.

Reports indicate that Colossus is programmed with between 600 and 720 different kinds of personal injuries. Each injury is coded with medical insurance diagnostic codes. The system assigns "severity points" to your injuries based on these codes. Those severity points translate to valuation dollars.

Colossus also analyzes a number of "factors" related to your injuries, treatments, and recovery. While the system is programmed with more than 12,000 factors, it likely will only look to a few dozen of them in evaluating any particular claim. The program's assessment of your injuries and these factors produces a range of values for your claim.

Here's a closer look at how Colossus views your injuries and some of the factors thought to play a prominent role in most valuations.

Your injuries. Colossus groups injuries into two general categories. "Demonstrable" injuries are those that are easy to see—think open wounds, broken bones, herniated discs, and injuries to organs. "Nondemonstrable" injuries are those that can't be seen, like sprains and strains. Demonstrable injuries get higher values than nondemonstrable injuries.

Other medical findings also can increase the value of a claim, including:

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

One of the biggest keys to getting Colossus to compensate you for your injuries, treatments, therapy, and more is making sure they're all well documented in your medical records. Each injured body part needs its own diagnosis and diagnostic code. Health professionals often are fond of the saying "If it ain't in the record, it didn't happen." Colossus looks at the value of your claim in much the same way.

Did you go to the hospital? Colossus considers whether you were:

  • taken from the accident scene to the hospital, or
  • admitted to the hospital for your injuries.

Injuries that require a hospital visit or hospitalization are worth more than those that don't.

Your care, and who provided it. The value of your care depends on several factors, including the treatment you receive and who provides it. Care provided by specialist M.D.s or D.O.s—orthopedists, neurologists, surgeons, and the like—is weighted more heavily than treatment by general practitioners or family doctors.

Colossus will pay for some chiropractic care, but the system tends to look at chiropractors with suspicion. When chiropractic manipulations are recommended or approved by an M.D. or D.O., Colossus might view the treatment more favorably.

Physical therapy, massage therapy, and acupuncture are covered. Here too, it helps if an M.D. or D.O. makes a referral or otherwise approves the therapy, with an order and an entry in your chart. As with all treatments, it's important that the need for this care, its frequency, and its duration are clearly documented. Neck and back treatments, in particular, will get close scrutiny. Each treatment date should be recorded.

Here are some other treatments that Colossus is programmed to recognize:

  • prescribed medications
  • diagnostic procedures like X-rays, CAT scans, MRIs, and myelograms
  • home traction
  • medical equipment and assistive devices like a cane, walker, or wheelchair
  • injections, and
  • immobilizing devices like a neck collar, a splint, or a bandage.

How long your care lasted. Colossus takes into consideration the length of your care. The longer you need what the program sees as necessary care, the higher the value of your claim. The key, of course, is whether Colossus sees your care as necessary. For instance, chiropractic care lasting more than 60 to 90 days is likely to be rejected.

Delays and gaps in treatment. Colossus doesn't like treatment delays and gaps. When you wait for two weeks after the accident to go see your doctor, the program will want an explanation. If you treat with your doctor for 30 days, skip two months, and then start seeing a chiropractor, Colossus is likely to devalue or ignore your chiropractic care.

Make sure your medical records tell the whole story. Perhaps your symptoms or injuries didn't show up right away. A treatment delay might be explained by the fact that you were waiting to see if your symptoms would resolve on their own. A gap in care might be attributed to your symptoms initially improving but then flaring up again when you discontinued treatment.

Whether you have lasting or permanent disability. Colossus assigns value to documented, objective disability. The system calls it "duties under duress." This is just insurance-speak for daily activities you continue to do, but that cause you pain. It includes things like:

  • returning to work but with lifting, walking, standing, light duty, or time restrictions
  • lawn and household maintenance work you continue to do, but with difficulty, and
  • hobbies and recreational activities you can only do for limited amounts of time or with increased discomfort.

There are two ways to document your disability. First, your doctor can do an "impairment rating" using the American Medical Association's Guides to the Evaluation of Permanent Impairment. Colossus gives significant weight to this rating, ranking it second behind the severity of your injuries.

Most primary care doctors don't do impairment ratings very often (or at all). If your doctor isn't comfortable doing it, ask for a referral to a rehabilitation medicine specialist. There will be a charge, but if your permanent disability is significant, it will be money well spent.

The second way to document your disability is simply to ask your doctor to put it in your medical record, without doing an impairment rating. If your disability is mild, this route will be less expensive. Colossus will factor the disability into your case valuation, but not as heavily as it will a formal impairment rating.

Gaming the Colossus System to Lower Case Valuations

Like any claim valuation software, Colossus can be manipulated to produce unfairly low case valuations. Bad faith lawsuits against insurers using the system have showed it's happened in the past. The ways to misuse the software are limited only by the imagination, but here are some examples.

Exclude High-Value Cases From the Benchmarks

Recall that Colossus compares your claim to settled claims in your area, using those cases as a benchmark for yours. There have been reports that some insurers deliberately exclude high-value and "policy limits" settlements from those benchmark cases. When high-dollar cases are omitted, it drives the value of all other claims (including yours) down.

Don't Tell Colossus About All Your Injuries or Treatments

It's up to the adjuster assigned to your case to input your injury and treatment information into Colossus. In a fair evaluation, all your injuries are assigned proper diagnostic codes and all treatments are accurately recorded. If the adjuster assigns a lower-value diagnostic code to your injury or doesn't tell Colossus about an injury or treatment, Colossus won't factor it as heavily (or at all) in your claim valuation.

Tell Colossus to Devalue Certain Injuries or Treatments

Like any computer program, Colossus does only what it's told to do. When an insurer tells the system to deduct 10% or 15% from the value of all soft-tissue neck injuries or low back injuries without disc involvement, Colossus will do exactly that. Colossus wasn't built to produce "fair" or "correct" valuations. It was built to produce the valuations it's told to produce.

How Do You Know If Your Claim Was Valued Using Colossus?

The only way to know is to ask the adjuster. In the past, some insurance companies told their adjusters to deny using Colossus (or any other valuation software). Some still refuse to disclose this information. But others will be more transparent about their use of claim valuation programs.

To be clear, there's nothing wrong with using Colossus or something like it, so long as it:

  • is used properly,
  • isn't the only valuation method an insurer uses, and
  • adjusters have discretion to use, modify, or disregard what Colossus says.

Unfortunately, attorneys who regularly represent claimants report that some insurance companies rely exclusively, or almost exclusively, on Colossus valuations. Claims adjusters—especially those who are young and inexperienced—might not be given any leeway to deviate from the Colossus settlement range, or their settlement authority might be limited to the low end of the range.

If the adjuster tells you that your case was evaluated using Colossus or a similar program, ask to see the valuation range, not just the number the adjuster tells you about. Most will refuse, which should tell you what you need to know about where in that range your offer falls.

Must You Accept a Colossus Valuation to Settle Your Case?

No. Colossus isn't infallible—far from it. There's nothing in your insurance policy or the law that requires you to agree to a Colossus valuation. You should accept an offer that you and your lawyer think is fair and reasonable. If Colossus produces that offer, great. If not, reject the offer and make a counteroffer. Your lawyer will let you know what a fair and reasonable offer looks like and will handle settlement negotiations for you.

Get Help With Your Case Valuation

Valuing personal injury claims is equal parts art and science. Colossus and other programs are quite good at the "science" part, but they can't replace human judgment and experience on the "art" side of it. That's where your lawyer comes in. An experienced attorney knows how to value your claim, is familiar with claim valuation software like Colossus, and will guide you through the process of negotiating a fair settlement.

When you're ready to move forward, here's how to find a lawyer in your area.

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