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What Are the Worst Insurance Companies in the US?

By December 9, 2019Insurance Companies

Insurance contracts should be simple—you pick out a policy and diligently pay your premiums. When an accident occurs, you submit a claim and your insurer should pay out benefits according to the terms of the policy.

Unfortunately, the insurance industry routinely violates the rights of its policyholders. Things have historically been so bad that each state has a governmental agency dedicated to regulating the industry.

Have you ever wondered what are the worst insurance companies in the country? Fortunately, the American Association for Justice (AAJ) compiled an extensive report. Based on a thorough search of public documents, including court documents concerning lawsuits, the group identified the insurers that are most likely to stiff their policyholders of much needed benefits.

Allstate

This giant insurer took the top spot in the AAJ report because of its confrontational stance to its own policyholders. As the AAJ report notes, this strategy was developed by consultancy firm McKinsey, as a way for Allstate to increase its profits. Unfortunately, McKinsey did not recommend that Allstate improve its service to win new customers and boost revenue.

Instead, Allstate’s strategy for boosting profits includes:

  • Making lowball settlement offers for far less than claims are worth
  • Refusing to budge from their initial settlement but instead taking cases to court (the so-called “boxing gloves” strategy)
  • Delaying claims in the hopes that claimants become desperate and accept a low settlement

Texas also fined Allstate for overcharging consumers in the state for their homeowners’ insurance policies—yet another way Allstate has tried to pad its bottom line using underhanded tactics.

State Farm

This insurer located in Bloomington, Illinois ranked #4 on AAJ’s list for worst insurance companies. We want to highlight them, however, because they are one of the largest providers of car insurance, which often comes into play after an accident. They also provide homeowner policies, which are frequently at issue in dog bite and premises liability claims.

Like Allstate, State Farm uses the 3 D approach—deny claims, delay any payment owed, and then defend with lawsuits. The company also has a history of failing to renew policies.

Farmers

Based out of California, Farmers is a provider of homeowners and auto insurance policies, and they are consistently ranked by consumers as one of the worst insurance companies in the country. Farmers made headlines when a 60-year-old woman in Washington got into a car accident, which left her in a coma for more than a week. Farmers initially denied the claim, trying to argue that the driver who hit her did so intentionally due to road rage. The Washington State Insurance Commissioner had to intervene before Farmers reversed course and paid out benefits.

Are You Struggling to Get an Insurance Claim Paid?

Texas law provides ample rights to policyholders that should guarantee that they are treated fairly. Unfortunately, many insurers still indulge in bad faith tactics, such as unnecessarily denying claims or refusing to pay benefits in a timely manner.

If you have an insurance dispute, DC Law might be able to help. Our firm has sued many insurance companies, and we can fight to protect your right to compensation. For help with your case, call us at 512-220-1800 to schedule a free consultation with an Austin attorney.