In order to determine which insurance companies in the United States are the worst, the American Association for Justice thoroughly investigated all of the major insurance companies.
The AAJ went through court documentation related to insurance claims, as well as reviewing complaints made to state insurance departments. Records from the SEC and FBI were used, as well as former insurance agent’s / adjuster’s depositions and testimony. All these records were compiled in an attempt to determine which insurance companies were “the worst.”
Some of the “winners” include these insurance companies:
The number one slot for worst insurance company went to Allstate, which apparently stood out rather glaringly. The “good hands” company reportedly orders its agents to employ the “boxing gloves” strategy, meaning they should always make aggressive decisions with claimants. In the mid-1990’s, Allstate made a conscious decision to put profits over policy-holders using hardball litigation tactics and lowball offers. A former Allstate agent claimed the company’s policy of “deny, delay, and defend” made claims incredibly expensive and time-consuming to resolve.
AIG, the world’s biggest insurer, ranked as the third-worst insurance company, due to its reputation for claims-handling abuses. Former AIG claims supervisors alleged that the company used tricks and deception to deny and delay claims, in some instances putting the checks in a locked safe until multiple complaints were received. The company is also known for fighting claimants for years in court over relatively minor claims. In 2006, AIG paid out $1.6 billion to settle a variety of financial shenanigans charges.
State Farm was rated the fourth-worst insurance company, primarily due to its response to Hurricane Katrina as well as to the California Northridge earthquake in 1994. The Northridge earthquake caused nearly $34 billion in damages. According to a State Farm ex-employee, signatures were forged on earthquake waivers in order to allow the insurance company to avoid paying legitimate claims. In 1999, Oklahoma tornadoes caused nearly $2 billion in damages and killed 44. A class-action suit was filed against the insurance giant, which alleged that the company undervalued damaged homes following the tornadoes or falsely claimed damages were the result of something else.
Farmers Insurance Company took the slot for seventh-worst insurance company. Not only do individual claimants receive poor service, U.S. businesses have been victimized by the parent company of Farmers, Zurich Financial Services. Internal documents from Farmers, as well as testimony from former employees, show that the company operated an employee incentive program which rewarded adjusters who paid out the lowest amount on claims and dissuaded claimants from seeking legal assistance. Farmers also had a run-in with state regulators following the Northridge earthquakes when it consistently failed to pay homeowners the full value of their homes.
United Health ranks number 8 as the worst insurance company and is consistently plagued with accusations that company greed endangers the health of patients. Money which should have been spent on medical treatments for policyholders apparently went to a former United Health CEO who faced both civil and criminal charges related to backdating stock options. In June of 2007, United Health was forced to suspend Medicare Advantage Program marketing after the federal government determined that United was misrepresenting its products.
Liberty Mutual ranked as the tenth worst insurance company for engaging in the same deny, delay, and defend tactics used by others on this list. The company has consistently led the way in complaints and stories regarding claimants who were short-changed. Liberty Mutual has pulled out of states due to their hurricane or earthquake susceptibility. While other insurance companies such as AIG, Zurich, and ACE settled charges of collusion with broker, Marsh & McLennan, in a bid-rigging fraud, Liberty Mutual has refused to concede guilt, maintaining its business practices were entirely lawful.
If you are in the market for home, auto, or health insurance, it could be beneficial to do some research before deciding on a specific company. If your current insurance company has refused to pay a valid claim, speaking to an experienced attorney could help you receive the compensation to which you are entitled.
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If your insurance company is giving you the runaround after a car accident, motorcycle accident, or motor vehicle accident, it is important to speak to an experienced insurance dispute lawyer immediately. At McLaughlin & Lauricella, we can negotiate with insurance companies on your behalf and ensure that your rights are protected along the way.
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