The insurance industry in America makes a staggering $1,000,000,000,000 annually from premiums, according to the American Association for Justice (AAJ). Yes, that is ONE TRILLION dollars.
The AAJ compiled a list of the worst insurance companies in the United States by examining thousands of records about the companies, including court documents, FBI records, and testimony from former insurance employees. Their research identified the companies that work against the clients that need them the most by rejecting claims, denying coverage, and jacking up premiums.
While this list stems from the opinions of AAJ researchers, experience handling countless insurance claims for injured clients leads our legal team to agree with the list. We also have had dealings with other insurers outside the AAJ list that use questionable tactics to minimize and avoid paying valid claims.
If you were in a car accident and are fighting with one of these insurance companies, you need to know that they are not on your side. They use proven tactics to get you to settle for a tiny fraction of what you really need to recover financially from your injuries.
The following list contains the 11 WORST insurance companies in America:
The AAJ list explains that even the CEO of this company admits that Allstate’s loyalty does not lie with its customers. CEO Thomas Wilson states that Allstate’s “obligation is to earn a return for our shareholders.” Documents they had to make public show that while they boast “good hands” in ads, they encourage their employees to fight against their own policyholders.
The AAJ says this of Allstate, “The company essentially uses a combination of lowball offers and hardball litigation.” To illustrate just how much money this company is making off its tactics, Wilson received more than $16,300,000 in compensation in 2019, while many injured claimants received far less than they deserved or nothing at all.
Allstate has also faced criticism for using highly confusing policy language that leads policyholders to believe they have certain coverage when, in reality, they receive a denial of their claims. Critics suggest that the company wants to collect premiums from policyholders who assume they have comprehensive coverage, only to have no recourse when disaster strikes.
All of this has earned Allstate the title of the worst insurance company.
This is one of the nation’s most prominent disability insurers, and it has established a poor reputation with its insureds. Unum is renowned for delaying and denying claims set forth to them. The CEO, Rick McKenney, earned over $9.7 million in a recent year, while disabled claimants received benefit denials. The media frequently investigates this company for their continual claim abuse, earning them the number two spot.
California and other states also launched investigations and filed claims against Unum regarding its claim denials, and the California Insurance Commissioner described Unum as an “outlaw” corporation. The United States Court of Appeals for the Ninth Circuit ruled that one denial defied medical science, as the insurer denied benefits and expected a man to keep working despite strict doctor’s orders not to. This is one of many examples of how Unum notoriously leaves claimants without the help they deserve.
Even one of Unum’s own employees could not get the benefits she needed after a multiple sclerosis diagnosis. The company denied her claims for three years despite medical evidence of her condition. Only when she sought legal representation did the company cave in this case, which demonstrates the critical nature of having the right lawyer fighting for your benefits.
AIG is the world’s largest insurance company, and CEO Brian Duperreault earned over $19 million in 2019. The company’s profits keep increasing, largely due to paying out on as few claims as possible. Somehow, AIG continually mistreats its clients without much recourse. Executives of this company allegedly try to increase prices after a catastrophe. The AAJ reported that “the company has been labeled the new ‘Enron’ because of charges of multi-billion dollar corporate fraud.”
Despite many issues raised in both civil and criminal courts, AIG continues to employ its tactics to earn as much as possible at the expense of its claimants. It reportedly designed its internal systems to maximize claim denials, creating unnecessary obstacles for claimants to get benefits on valid claims. This is true for both consumer and commercial policyholders.
AIG also has a reputation for not playing fairly in court, and the company has received sanctions due to its lawyers’ wrongful tactics in discovery and other proceedings. When you deal with AIG, prepare to put up a fight to get the payment you deserve by having the right legal team in your corner.
4. State Farm.
State Farm is the highest-earning insurance company in the United States, and it did not get this distinction by willingly paying the full amount on every claim. The company has earned the trust of many policyholders with its famous slogan, “Like a good neighbor, State Farm is there,” though too many people later come to feel this slogan is not true.
This company has allegedly committed some truly deplorable acts to avoid paying their clients. After Hurricane Katrina, State Farm is reported to have altered engineering reports about damage from the storm, as well as forging signatures on earthquake waivers after significant earthquakes. State Farm is the largest property-casualty insurance company in the country. Like most insurance companies, State Farm may go to extreme lengths to delay and deny claims, all while paying CEO Michael Tipsord $8.5 million or more per year.
One policyholder was a United States senator who made it his mission to improve insurance regulation and policy in the country following his experience with State Farm and its lack of coverage. State Farm’s actions involving claims from disaster survivors illustrate that this company will not hesitate to deny deserved benefits when people need them most.
Previously known as Wellpoint, the Anthem insurance brand covers many people under its Blue Cross and Blue Shield plans, among others. However, when it comes to actually providing that coverage, Anthem often fails to come through—despite numerous government reprimands and fines throughout recent years for canceling coverage or denying payment on covered claims. All the while, CEO Gail K. Boudreaux made $15,400,000 in 2019.
This company has a long-running history of canceling the policies of chronically ill or pregnant policyholders and otherwise treating clients unfairly. The company has reportedly even requested that medical professionals report confidential information about preexisting conditions of policyholders to cancel their coverage. Clearly, Anthem seems to be about the bottom line rather than the well-being of policyholders, who often need medical treatments for serious health conditions or injuries.
Despite customers continually ranking the company low in customer satisfaction, Farmers Insurance still brings in millions and millions of dollars in profits each year. The insurance company’s continued financial success hasn’t stopped Consumer Reports and JD Powers & Associates from rating this company among the country’s worst auto and home insurance companies.
The company has specific tactics to limit payments to claimants, as it even offers incentives to its employees if they meet their low payment goals. Leaked internal documents showed that adjusters receive training to put profits ahead of policyholder interests and rights. If adjusters successfully minimize payments by getting claimants to accept lowball offers, they can receive pay increases, bonuses, and other perks.
This strategy makes it clear what the priority of Farmers is—its own pockets.
The tactics of UnitedHealth not only make the company lots of money but also potentially put patients in danger. According to the AAJ, “Physicians report that reimbursement rates are so low and delayed by the company that patient health is compromised.” The company regularly lowballs reimbursement rates for medical care, and patients must find a way to cover the bills themselves.
UnitedHealth claims its system is fair, as the reimbursement rate calculations are completed by a separate company, Ingenix, and not in-house. What most people do not know, however, is that UnitedHealth owns Ingenix, so it can control the calculation efforts in its favor.
David Wichmann, the outgoing CEO, received $18,900,000 in 2019, and the company’s success is largely due to a partnership with AARP to seek senior policyholders. The insurer then targets its elderly customers with high premiums for seemingly no other reason than because it can.
8. Global Life.
Formerly called Torchmark, this recently renamed insurer largely focuses on policies in Alabama, Texas, and other southern states. Despite 100 years in business in various forms, the company is reported to employ some very distasteful practices.
For one, the insurer has been under scrutiny for charging higher premiums for their minority customers than they charge their caucasian customers, especially for coverage of burial expenses. The company has also faced prior allegations of defrauding senior citizens and using many subsidiary companies to boast case-specific insurance, such as cancer insurance, that is met with the same lack of customer care as the mother company reportedly fails to provide.
9. Liberty Mutual.
While it may not be as good at denying and delaying claims as State Farm and Allstate, Liberty Mutual reportedly sought the help of the same consulting firm that the other two companies did to reduce costs. This focus on cutting costs led to delayed claim processing, wrongful claim denials, and other tactics.
Liberty Mutual also started abandoning and refusing renewal to clients in high-risk areas such as those susceptible to hurricanes or floods, according to reports. This left policyholders without the coverage they needed in the event of a disaster that was completely beyond their control.
While these tactics stand to harm policyholders and claimants, they improved the bottom line of the corporation. CEO David Long made $19,400,000 in 2018, a 14 percent increase from the previous year, so it doesn’t seem that the insurer is having problems keeping money in the company.
While it is not on the AAJ’s list, the United Services Automobile Association (USAA) is another insurance company that is notoriously difficult to deal with. While USAA proudly touts itself as the best solution for military members and their families, it is reportedly still very much focused on its profits—which shattered company records in 2019, amounting to $4 billion.
One tactic that USAA reportedly uses a lot is delaying claim processing. You might wonder why an insurance company would not want to process claims as fast as possible, but this tactic often ensures that claimants feel additional financial pressure. When the bills are piling up quickly, and it is uncertain whether USAA will pay a claim at all, people are much more likely to accept any offer that comes their way to make sure they get a check in their hands. Unfortunately, that check is often far less than it should be, leaving them without the funds they need.
USAA claims to care about its military-member policyholders, but these reports and allegations suggest that, in reality, what the company cares most about is its ever-increasing profits.
With their cheery commercials all over your television, you likely would assume that Progressive is a friendly, helpful, and customer-forward insurance company. However, recent court cases paint a much different picture.
In recent years, Progressive has faced numerous high-stakes bad faith insurance claims brought by policyholders and claimants. While some of these cases have settled, others are ongoing.
In some of these cases, Progressive allegedly failed to act effectively to settle claims that involve severe injuries to children caused by Progressive policyholders. One such case finally settled for $22 million, while another pending case demands $50 million for Progressive’s bad faith claim handling.
Despite regularly making JD Power’s list of the worst car insurance companies, Progressive still managed to report a net income of over $5 billion in 2019, an almost 44 percent increase from 2019. While raking in the profits, it seems that Progressive left many policyholders out in the cold.
These Companies Can Afford to Pay You
These major insurance companies by no means lack the funds necessary to properly compensate their customers or the people injured by their policyholders. State Farm tops the list with $5.6 billion in profits in 2019. Only three of these companies made below a billion dollars—which means 70 percent of the worst insurance companies made over a billion dollars, yet they did everything they could to keep that money away from claimants and injured victims.
Tactics Used by Insurance Companies to Hurt Consumers
While these insurance companies are on the list of the worst insurers for various reasons, the fact is that all insurance companies are in business to make money. That means that they are financially incentivized to collect premiums every month while paying out as little as possible on every claim they receive. For this reason, they train their representatives to get people who make claims to settle for less than they actually need. Some of these tactics include:
Making Laughably Low Initial Offers
One of the most common tactics that insurance companies use is making initial offers for far below the value of claimants’ cases. Starting with low offers makes subsequent higher offers look more attractive, even if they are still inadequate in light of your losses. When dealing with an insurance company, expect a low initial offer, and do not let it affect your position on the benefits or compensation you need and deserve.
Requesting Access to Claimants’ Complete Medical Histories
When people make insurance claims for help with medical expenses, insurance companies often make overbroad requests to dig through their medical histories to find anything that they may use to justify calling an injury a “preexisting condition.”
Have a lawyer make sure that you only sign a narrowly tailored medical record authorization that only allows access to records that are relevant to your claim.
Pressuring Claimants to Provide Recorded Statements
Insurance companies know that many people who make claims have never been through the process before and do not have the legal training that allows them to recognize certain things that may hurt their claims. For this reason, insurance companies often pressure claimants to provide recorded statements in which they answer questions about the incidents that led up to their claims.
Unsurprisingly, insurance company representatives often ask leading questions during these recorded statements in an attempt to get claimants to admit fault or verbally minimize their losses to justify a denial or lower settlement offer.
Misrepresenting Claimants’ Rights
While it would be nice to trust that the insurance company had your best interests in mind, the reality is that insurance company representatives may misrepresent your rights to you. Some companies personally incentivize insurance adjusters with bonuses or the opportunity for career advancement by keeping payouts low, so take everything they say with a grain of salt.
Unfortunately, in some instances, they may misrepresent your rights to you to get you to settle for less. For example, they may tell you that you don’t qualify for benefits for future medical expenses related to an accident when you actually do.
If you relied on this information, it may lead you to accept a far lower settlement than you should. The most effective way to protect your rights is to have a lawyer review your case before accepting a settlement.
Suggesting That Claimants Will Get Less Money If They Retain a Lawyer
In some cases, insurance company representatives try to talk claimants out of retaining a lawyer to handle their claims by telling them that they will get less money in their pockets because of legal fees.
While every claim is different, research indicates that people represented by counsel obtain significantly higher insurance settlements than people who handle their claims themselves.
Delaying Claims While Claimants’ Bills Pile Up
Insurance companies understand that people are more likely to settle for less when they are under financial pressure. As a result, they may take their time processing a claim while the claimants’ bills are piling up and perhaps affecting their credit scores.
Rushing to Settle Cases Before Claimants Understand Their Rights
While insurance companies stretch claims out for as long as possible in some cases, in others, they rush to make settlement offers as quickly as they can. In these cases, they are often trying to get claimants to settle their cases before they have a chance to speak to a lawyer and determine the actual value of their claim. Similarly, insurance companies may attempt to settle cases quickly, hoping that they can get claimants to sign away their rights before they recognize all of their losses.
The Benefits of Retaining an Attorney for Your Insurance Claim
Fortunately, retaining a lawyer to represent you can even the playing field and obtain the benefits or compensation you deserve—even if you are dealing with one of the worst insurance companies out there. Once an attorney represents you, the insurance company will communicate with him or her, protecting your rights throughout the entire process.
Some of the specific ways in which an attorney can help ensure that your insurance claim goes as smoothly as possible include:
Determining against whom you can file a claim
Reviewing your policy and ensuring that the insurance company honors its obligations
Evaluating your losses and submitting appropriate documentation in support of your claim
Attempting to negotiate a fair settlement agreement
Filing a lawsuit, if it becomes necessary
When an accident injures you, you must deal with insurance companies. The key to successfully beating them is to hire a personal injury attorney who knows the games insurance companies play and knows how to thwart their attempts.
© 2020 by Console and Associates. All rights reserved.National Law Review, Volume XI, Number 41