Ten Worst Insurance Companies in America (#1-5)

As Virginia personal injury attorneys, we deal with auto insurance companies all the time. We’ve got our share of horror stories about companies denying claims and making ridiculous low-ball offers. So does the American Association for Justice (AAJ), which recently posted it’s list of the ten worst insurance companies in America.

1. Topping the list is Allstate, who has made it clear that their goal is to earn profits and not to protect their insured’s. In fact, Allstate’s CEO Thomas Wilson is on record as having said “our obligation is to earn a return fo rour shareholders.” According to the AAJ survey, Allstate does this by offering it’s policyholders unjustifiably low settlement offers cranked out by their claim-evaluation software called Colossus. One former agent said that Allstate’s effort is to make the claims process “so expensive and so time consuming that lawyers would start refusing to help [Allstate] clients.”

2. Unum. Unum is one of the nation’s largest disability insurance companies. They have gained a reputation for unfairly denying and delaying the claims process. Unum has been constantly followed by federal and state regulatory officials and was even forced in 2005 to settle a battle with insurance commissioners from 48 different states over their claims-handling procedures. As a result, the company reopened more than 200,000 cases and paid $15 million.

3. AIG. Another large insurer, AIG has come under increased scrutiny for raising their prices during catastrophies. In 2006, AIG was forced to pay $1.6 billion to settle claims for a financial mess that commentators began to describe as “the new Enron.” In 2008, five of their executives were found guilty on criminal fraud charges.

4. State Farm. The “good neighbor” company made AAJ’s list. The largest property casualty insurer in America, State Farm has gone to great lengths to avoid paying claims. At the advice of McKinsey & Co., a large consulting group, State Farm has been known to use the “three D’s” of insurance claim handling: deny the claim, delay payment, and defend the lawsuit.

5. Conseco. This company sells long-term car policies. Their typical company is the elderly American. Conseco made the list because of their habit of using the deteriorating health of their insureds to their advantage. If they can deny claims for long enough, eventually the insured will pass away and so will the obligation to pay a claim. In May of 2008, Conseco settled claims brought by 39 states and the District of Columbia over the pattern of abuses for their long-term care insureds. As part of the settlement, the company paid $2.3 million in fines and returned $4 million in restitution to its policyholders.