Top Ten Worst Insurance Companies in America

Survey Reveals Many Insurance Companies Placing Profits Over Protection

Many of us have disability insurance to cover us in the event the unexpected should happen. Imagine that day coming, filing your claim and receiving a letter a few weeks later telling you that your coverage has been denied. Instantly the stresses of your disability are compounded by financial stresses and fears, causing sleepless nights and making any recovery far more difficult to attain.

Unfortunately, many people discover that stories like this are not that unusual. When insurance companies deny or delay making a claim without having good justification for doing so, there may a basis for a bad faith insurance claim.

Insurance Companies Place Profits Over People

Many people often assume that insurance companies are there to protect them. What many discover is that insurance companies are frequently more concerned with profits than the people they are supposed to look after. The focus on profits has resulted in an industry that regularly makes well over $1 trillion annually.

To accomplish this mass of wealth, insurance companies had to make some cuts. A recent American Association for Justice (AJJ) study discovered just how they did this.

Their goal was to identify the top ten worst insurance companies in America for consumers.

The AJJ’s Top Ten Worst Insurance Companies

The survey reviewed thousands of court documents and various records to compile a list of the worst insurance companies in the country. The following insurers were rated poorly for either service or bad faith:

  • Allstate
  • Unum
  • AIG
  • State Farm
  • Conseco
  • WellPoint
  • Farmers
  • UnitedHealth
  • Torchmark
  • Liberty Mutual

Allstate provided the worst service. Researchers stated the company’s “concerted efforts to put profits over policyholders has earned its place as the worst insurance company in America.” The company began new practices focusing on boosting their bottom line in the nineties. The strategy focused on lowball offers, waiting to see if disgruntled policyholders would drop a claim and then countering with hardball litigation techniques if the claimant pursued a more reasonable offer. As a result, payouts for auto claims dropped from 63 percent to 47 percent and the company saw profits more than double.

Another company noted for poor insurance offerings was Unum, a leading disability insurer with a long history for unfairly denying and delaying claims. The study found former employees went on record stating they were ordered to deny claims to meet cost saving goals resulting in an estimated $6 million in savings per year.

Many of these insurers earned profits by either delaying or denying claims, or dropping coverage when clients became disabled.

Basics of Bad Faith

Insurance companies have several duties they owe to all of their clients. They are:

  • A duty to defend;
  • A duty to work to settle claims in good faith;
  • A duty to pay claims/coverage.

All insurance companies are bound by an inherent covenant of good faith and fair dealing. That means that they are not allowed to do anything that would interfere with a person’s ability to receive the benefits that they are owed under their contract.

In California, a breach of an insurer’s duties may be construed as bad faith if there was not good cause to back up the insurance company’s actions. An insurance company cannot delay or deny a claim without good reason. To aid in this measurement, the California Fair Claims Practices Law was developed to help attorneys evaluate the conduct of insurance companies.

Importance of a Bad Faith Insurance Attorney

Also known as the Fair Claims Settlement Practices Act, these regulations place the following requirements on insurance companies in California:

  • Insurers are not allowed to misrepresent or conceal benefits, coverage, time limits or other provisions
  • Insurers must promptly investigate and process claims
  • Provide written explanation for any denial of claims
  • No insurer shall attempt to settle a claim with unreasonably low settlement offers

The job of a bad faith insurance attorney is to investigate a claim and hold insurance companies accountable. A bad faith insurance attorney can help a person whose claim has been unfairly denied recover their policy benefits and interest.

There are time limits, otherwise known as a statute of limitations, for bringing a bad faith claim in California. If you or a loved one is the victim of unfair dealing by an insurer, it is important to contact an experienced Los Angeles bad faith attorney to ensure all your legal rights and remedies are protected.