The 10 Worst Insurance Companies in America

Buying insurance is supposed to give you peace of mind, knowing that you and your loved ones will be taken care of in case of an accident or unexpected illness. Unfortunately, some insurance companies employ deceptive tactics and deny legitimate claims in order to boost their profits. Here are 10 of the worst insurance companies in America according to consumer surveys and investigative research:

1. Allstate

• Allstate publicly promises “good hands” but privately instructs agents to use “boxing gloves” against policyholders.
• Uses lowball offers generated by secretive software called Colossus to settle claims. Those who don’t settle face aggressive litigation tactics known as the “three Ds”: deny, delay, and defend.
• Since implementing these tactics, Allstate has seen profits double from 1990s levels to $4.6 billion in 2007.
• Over 1,200 complaints filed against Allstate after Hurricane Katrina for manipulating engineering reports and refusing wind damage coverage. Fined over $18 million in Maryland for policy non-notifications and premium increases.

2. Unum

• Specializes in disability insurance but systematically denies and delays claims until policyholders give up or die.
• Over 200,000 claims ordered reopened after investigations revealed denial quotas and policy misrepresentations.
• CEOs Chandler and Watjen walked away with $17 million and $7.3 million in compensation despite scandals.

3. AIG

• Known for claim delays, use of “claim improvement” tactics like shredding documents, and fighting claimants for years in court.
• CEO Hank Greenberg described civil justice attorneys as “terrorists” then launched massive lawsuit battle with his former company alleging $4 billion in cover-ups.
• Paid $1.6 billion to settle various charges of financial shenanigans, including bid-rigging schemes with Marsh & McLennan.

4. State Farm

• Hired McKinsey consultants to increase denial rates and adopted “boxing gloves” approach after “good hands” image failed to maximize profits.
• Employees forged signatures on earthquake waivers and altered engineering reports after Northridge quake. Also sued by Hurricane Katrina victims.
• Nonrenewals and market withdrawals common after catastrophic weather events, alongside skyrocketing rates. Yet profits have doubled over 1990s.

5. Conseco

• Targets senior citizens with long-term care policies then delays and denies their claims until they die or give up.
• Forced into bankruptcy after questionable accounting tactics could no longer hideFinancial troubles from underestimating costs.
• Fined $2.3 million in 2008 and ordered to pay $4 million in restitution for abusing policyholders. Yet scandals continue.

6. WellPoint

• Under fire in California for over 900,000 policy violations including improper rescissions and claim denials. Fined over $12 million.
• Also fined millions in other states for systematically overcharging and underpaying customers.
• Sued by doctors for using software to deliberately underpay fees for treating policyholders.

7. Farmers

• Consistently ranks at the bottom of homeowner satisfaction surveys.
• Sued for denying claims by blaming damage on pre-existing conditions, including one event where a house was thrown onto a home during a storm.
• Employees rewarded with gift cards and pizza parties for meeting low claim payment goals. Fined over $750,000 in North Dakota.

8. UnitedHealth

• CEO William McGuire backdated stock options to gain over $1 billion before resigning in scandal in 2006.
• Sued by AMA for using rigged database to underpay doctors for treatment. Delayed reimbursements also endanger patients.
• Regulators accuse company of overcharging seniors and dropping sick policyholders. UnitedHealth fined $364,750 in Arizona alone.

9. Torchmark

• Targets low-income Southerners with deceptive tactics like manipulated rates, denial of non-English speakers, and policies marketed as lifetime coverage then changed without notice.
• Forced to stop collecting premiums on discriminatory burial policies that charged African-Americans up to 36% more.
• Caught scamming seniors into unneeded policies by disguising salespeople as government representatives.

10. Liberty Mutual

• Adopted McKinsey “delay, deny, defend” tactics and frequently abandons homeowners after disasters, including those far from coasts.
• Whistleblowers allege company asked engineers to alter reports when findings conflicted with claim denials after Katrina.
• Still fighting charges that it systematically rigged bids to overcharge customers by billions in premiums.

While buying insurance is supposed to provide peace of mind, these 10 companies put profits over their policyholders through unethical practices like systematic claim denials, policy misrepresentations, and even bid-rigging fraud. Consumers deserve to be treated fairly and receive the coverage they pay for, but must remain vigilant against predatory insurance practices that prioritize corporate profits over paying valid claims.