10 Worst Insurance Companies For Denied Claims
10 WORST INSURANCE COMPANIES FOR DENIED CLAIMS
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10 WORST INSURANCE COMPANIES FOR DENIED CLAIMS
It can be hard to imagine, but insurance companies take in about $1 trillion annually, according to the American Association for Justice (AAJ)1. With as much money as we pay to these companies, we expect them to process claims quickly and fairly. Unfortunately, that’s not always the case. Our Colorado insurance attorneys explain.
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Table of Contents
What types of insurance companies unfairly deny claims?
Several companies offer various insurance policies and types of coverage, including:
Homeowners insurance
Renters insurance
Car insurance, including liability coverage
Health insurance
Disability insurance
Pet insurance
Travel insurance
While some of them do their best for policyholders, many use the “deny, delay, defend” strategy to minimize the amount paid for any claim. During the claims process, insurance adjusters may try to confuse victims with complicated explanations of coverage limits and policies. They might pressure a policyholder into accepting less than they deserve.
Many in-depth investigations2 have shown that some of the biggest names in the American insurance industry across all 50 states repeatedly cut corners, refuse to pay claims, and choose a strategy of greed over consumer benefit.
Which insurance companies are considered the worst?
Are you frustrated by an insurance company refusing to pay your claim? Are you researching which insurance companies are the best and which are the worst? You’ve come to the right place. Here are what some consider to be the ten worst insurance companies in the United States:
1. Allstate
Allstate has provided insurance to Americans since 1931. As of 2020, Allstate supplied 10.4% of private passenger auto insurance, 9.8% of personal lines insurance, and 8.5% of homeowners insurance policies in the United States. More than 54,000 people worked full-time for Allstate at the end of 2021. In 2022, Allstate generated $51 billion in revenue and placed 84th on the Fortune 500, Fortune Magazine’s list of U.S. companies with the highest revenues.
Allstate CEO Thomas Wilson admits that his priority is the shareholders — not the insured parties with claims. The company recently announced plans to raise its rates by about 5.1%. They expect the cost increase to generate another $1.2 in premiums. (Insurance Business Magazine3).
2. Progressive
Progressive was launched in 1937. From 2020 to 2021, Progressive’s gross profit fell from $7.616 billion to $4.707 billion.
State of Georgia insurance officials accused Progressive of cutting corners and undervaluing claims. They say that taxes paid to an insurer party need to be calculated fairly based on the cash value of the vehicle.
Progressive says they correctly calculated taxes as part of claim payouts, but they recently changed their directive to comply with state oversight on the issue. (CBS 46 News4).
3. UnitedHealth
Richard T. Burke launched UnitedHealth in 1977. Unlike many other insurance companies, UnitedHealth focuses exclusively on health insurance.
Federal investigators say that UnitedHealthcare underpaid COVID-19 vaccine reimbursements. They explained the insurer would adjust their payments for millions of vaccines administered across the country. The Medicare rate was $40 per vaccine. Authorities say the insurance company did not pay even that amount per vaccine administered.
The Centers for Medicare and Medicaid Services say that previous payouts didn’t even cover the cost of giving a vaccine. Authorities also noted that UnitedHealthcare paid too little for COVID-19 testing materials, prohibiting providers from offering testing services. (California Medical Association5).
4. State Farm
State Farm has been in business since 1922. In 2022, State Farm generated revenue of $89 billion, securing its place as the 44th company on the Fortune 500.
Their motto is, “Like a good neighbor, State Farm is there.” But do they pay valid claims? The United States Supreme Court recently upheld a fraud verdict against State Farm in their handling of claims following Hurricane Katrina.
The ruling found claims adjusters tried to deny valid claims by classifying wind damage as flood damage. Victims had to resort to whistle-blowing to hold the insurance company accountable for their actions. (NPR6).
5. Elevance Health (formerly Anthem)
Founded in 1946, Anthem is now known as Elevance Health. Their revenue increased from $138.63 billion in 2021 to $156.59 billion in 2022.
One medical center in Maine says that Anthem Insurance is so bad that it will no longer be an in-network provider. They’re giving the insurance company the boot over what they claim is more than $70 million in unpaid claims to the MaineHealth network, including $13 million to the hospital alone.
The move could impact more than 150,000 people in Maine. Patients still using the company will have to pay higher out-of-network rates to be seen at Maine Medical Center or within the MaineHealth network. (Press Herald7).
6. Unum
Unum has been providing insurance to Americans since 1848. Unum Group’s revenue dropped from $13.162 billion in 2019 to $12.014 billion and $11.991 billion in 2020 and 2021, respectively.
One of the leading disability insurers in the United States, Unum pays its CEO an estimated $9 million a year. The company was also the subject of litigation from a plaintiff who was denied long-term disability benefits.
The plaintiff alleged that the insurance company used the wrong standards to determine benefit eligibility and made a decision that was arbitrary and capricious. A court recently granted summary disposition in favor of UNUM Group. (Kelly v. UNUM Group, D. Utah, 20228).
7. Federal Employee Benefits
Despite the name, Federal Employee Benefits does not refer to a government insurance program. Federal Employee Benefits is a little-known insurance company started by Jaques Andres Frym of Pooler, Georgia. He pleaded guilty to false oaths and false tax documents. He was ordered to pay $142,042.12 in fines and restitution. Frym filed for bankruptcy to dismiss millions in debt. In documents, he underreported income and denied ownership of the insurance company. (WRBL9).
8. Farmers
People have turned to Farmers for insurance since they opened their doors in 1928. Based on revenue and market share, they rank among the top five homeowner’s insurance companies in the U.S. They’re currently 295th on the Fortune 500 list.
In 2021, Farmers Insurance Group was ordered to pay a former executive a multi-million dollar sum after improperly firing him. The verdict found that the company fired the man because he was willing to testify in a pay bias lawsuit filed by female in-house lawyers. (Coates v. Farmers Insurance Group Inc.10).
The jury found that the company retaliated in violation of the California Fair Employment Housing Act and other laws prohibiting unlawful termination. (Bloomberg Law11).
9. Liberty Mutual
Liberty Mutual launched in 2001, making it one of the youngest companies on this list. Its revenue dropped from $3.068 billion in 2021 to $414 million in 2022. The company is currently 86th on the Fortune 500.
Liberty Mutual customers may be surprised if the insurer chooses not to renew their policy. Liberty Mutual recently told one homeowner that his home was too much of a risk for wildfires. Critics say non-renewal rates are high, with the company sizing up customers and dropping ones that they consider high risk, even if the customer has been loyal. (Insurance Business America12).
10. USAA
USAA started in 1922, and like Farmers, it’s one of the country’s biggest homeowner’s insurance companies. It ranks seventh for property and casualty insurance. From 2020 to 2021, its revenue grew from $35.617 billion to $36.296 billion. USAA holds the 114th spot on the Fortune 500.
USAA advertises itself as friendly to U.S. service members. However, it’s the CEO who is raking in millions. USAA CEO Wayne Peacock received $1.9 million for his services in 2021. The company reports billions of dollars in profits. (Repairer Driven News13).
A class-action lawsuit is underway against the company in Texas. It alleges that policyholders had their vehicles deemed total losses without agreeing, having their titles revoked and salvaged. (RDN14).
Other companies that have topped the worst insurance company lists in recent years include AIG, Global Life, Conseco, WellPoint, and Torchmark.
What makes an insurance company good?
Choosing an insurance company can be challenging. You may opt for an insurance provider who supplies several types of policies so you can save money bundling your policies. However, there are other factors to consider when choosing the best provider.
Stability
High profits could be a sign of an insurance company that’s denying claims or pressuring claimants to take low settlement offers. However, financially stable companies are more likely to stay in business instead of folding from heavy losses.
Determining which companies have a sound, profitable business strategy and which insurers profit from disreputable practices can be challenging. You can learn about insurance companies from consumer reviews, which could help you determine whether their profit margins come at the expense of frustrated clients.
Price
Choosing the cheapest insurance plan may be tempting, but there may be better options you should consider. Compare what the coverage includes for the policy price. You may benefit in the long run if you pay more for coverage from an insurance company with a good reputation instead of choosing inexpensive coverage from a provider known for denying claims.
Service and communication
Good insurance companies make it easy to file claims and answer your questions when you call. You shouldn’t feel like your insurance company is trying to avoid your questions or dismiss your concerns. Your insurance company should take all the time needed to put you at ease when you reach out about a claim or have concerns about your policy.
What makes an insurance company bad?
Bad insurance companies use unscrupulous tactics intended to minimize their costs. Many tactics bad insurance companies use involve poor communications, misinformation, and deceit.
An insurance company is bad if they:
Don’t clearly explain why a claim is accepted or denied
Fail to respond to claims within a reasonable period of time
Make up reasons that a policy does not cover you
Ignore evidence that the claim is valid
Hope that people will give up if they delay a claim
Make it too hard to report a claim
Constantly ask for more information when processing a claim
Purposefully refuse coverage of claims that are covered by their policies
Undertake other actions to refuse payment in bad faith
Other tactics insurance companies use to inflate their profits include the following:
Lowball initial offers: Bad insurance companies try to minimize payouts by offering less than the claimant deserves. Claimants with financial issues may feel pressured to accept a low offer to ensure they receive compensation quickly. These claimants may need to be made aware there are other options for financial assistance they can turn to while resolving their claim.
Requesting claimant’s full medical history: Unscrupulous insurance companies may use a claimant’s medical history to deny a claim. Suppose an insured person seeks compensation for a spinal cord injury they claim they received in a car accident. Suppose the insurance company accesses their medical history. In that case, it may use minor complaints about back pain to argue that the claimant suffered a spinal cord injury before the accident, even if they were never diagnosed with an SCI.
Trying to coerce the claimant to make a recorded statement: Every claimant has the right to legal representation. Pressure to record a statement locks in your statement, making it hard to add relevant details later. Sometimes, insurance companies push for formal statements right after the accident. Accident victims may not be aware of all the facts. They could be in shock or suffering from other physical injuries. Accident victims should have the time to recover and discuss the situation with an attorney before answering an insurance company’s questions or providing a signed or recorded statement.
Being dishonest about claimant rights: Bad insurance companies lie about your rights to prevent you from filing a claim or seeking all the compensation you deserve. These insurance companies may also provide false information, such as telling you you’ll get more money without a lawyer because you won’t have to pay legal fees. These insurance companies may deny claims or delay processing, creating a financial burden to pressure you to accept less than the total compensation you deserve.
Your insurance company should take the time needed to answer your questions, explain your rights, and present your options. Your insurance company shouldn’t make you feel rushed into decisions with insufficient information.
What can you do if you’re treated unfairly by the insurance company?
It’s no secret that insurance companies make a profit when people pay their premiums. But they may try to pad the bottom line by refusing to pay good claims. They may make the claims process difficult to understand. Communication may be minimal.
Are you the victim of a bad insurance company? Don’t give up! The steps to file a claim could be complex. Our Colorado personal injury lawyers can help you fight back and get fair compensation for your claim. Contact us today to get started with a free consultation.
How we can help you stand up for your rights
Contact us for a free case evaluation. You deserve legal counsel, and we ensure financial worries won’t stop you from talking to a lawyer because we charge contingency fees. That means you don’t pay us until you win your case.
Whether you’re seeking compensation after a car accident, fighting for funds to fix your house after suffering storm damage, or getting approval from your health insurance provider for medical treatment, you have the right to get the coverage your insurer promised. Claimants shouldn’t have to deal with the stress of denied claims, or low settlement offers while coping with unexpected costs for repairs or medical bills. Our lawyers and advocates draw from years of experience and expert knowledge of case law to fight bad-faith insurers, and we will only bill you for legal fees once we get you the payout you deserve.
At Bachus and Schanker, we also understand insurance claims often stem from tragic circumstances. That’s why we have a team of Victim Advocates providing professional and personal services to our clients. Our Victim Advocates will help you find financial resources you can use while waiting for your settlement. They also investigate each case, ensuring we seek compensation from the party responsible.
Contact our Denver lawyers today! We’ll answer your legal questions and explain how our legal team can help you with your insurance claim.
Sources:
3Adriano, L. (18 March 2022). Allstate reveals plans to raise auto insurance rates. Insurance Business Magazine. Retrieved 14 April 2022.
12Adriano, L. (23 July 2018). Liberty Mutual, other insurers start dropping risky clients. Insurance Business Magazine. Retrieved 14 April 2022.
1American Association for Justice (AAJ). The Ten Worst Insurance Companies In America. Retrieved 14 April 2022.
5California Medical Association. (16 November 2021). UnitedHealth will repay providers underpaid for COVID-19 vaccine administration. Retrieved 14 April 2022.
2Chalon Smith, M. (8 July 2021). J.D. Power names best and worst homeowners insurance companies. Insurance.com. Retrieved 14 April 2022.
10Coates v. Farmers Grp., Inc., Case No. 15-CV-01913-LHK (N.D. Cal. Dec. 9, 2015).
11Dorrian, P. (17 December 2021). Fired Farmers Insurance Lawyer Gets $155 Million for Retaliation. Bloomberg Law. Retrieved 14 April 2022.
9Gibson, S. (1 April 2022). Georgia insurance company owner sentenced to prison for tax fraud.
Hayes, A. (2023). Top 10 Insurance Companies by the Metrics.
8Kelly v. Unum Grp., 2:20-cv-00622-JNP-DBP (D. Utah Mar. 21, 2022).
7Lawlor, Joe. (7 April 2022). Maine Medical Center will leave Anthem insurance network, citing overdue payments. Portland Press Herald. Retrieved 14 April 2022.
Libatique, R. (2023). Liberty Mutual releases latest financial results.
14Lowery, L. (18 February 2022). Class action lawsuit takes USAA to court over thousands of total loss claims. Repairer Driven News (RDN). Retrieved 14 April 2022.
13Lowery, L. (29 March 2022). USAA CEO, other top executives rake in millions; Auto insurance companies seek added rate hikes. Repairer Driven News (RDN). Retrieved 14 April 2022.
Progressive Gross Profit 2010-2023: PRG. (2023).
Revenue for Elevance Health. (2023).
6Totenberg, N. (6 December 2016). Supreme Court Upholds Hurricane Katrina Fraud Verdict Against State Farm. NPR. Retrieved 14 April 2022.
2023 Fortune 500: Allstate. (2023).
2023 Fortune 500: Farmers. (2023).
2023 Fortune 500: Liberty Mutual. (2023).
2023 Fortune 500: State Farm. (2023).
2023 Fortune 500: USAA. (2023).
United States Securities and Exchange Commission: Allstate. (2023).
Unum Group Revenue 2010-2023. (2023).
WRBL. Retrieved 14 April 2022.4Samler, Harry. (28 March 2022). Commissioner says Progressive was ‘gaming the system,’ issues statewide directive. CBS 46 News. Retrieved 14 April 2022.
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