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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WHAT TYPES OF INSURANCE COMPANIES UNFAIRLY DENY CLAIMS?
There are several companies that offer various insurance policies and types of coverage, including:
- Homeowners insurance companies
- Renters insurance
- Car insurance, including liability coverage
- Life insurance
- Health 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 10 worst insurance companies in the United States:
Allstate CEO Thomas Wilson admits that his priority is the shareholders—not the insured parties who have 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).
State of Georgia insurance officials accused Progressive Insurance 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)
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
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)
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)
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
Federal Employee Benefits is a little-known insurance company started by Jaques Andres Frym of Pooler, Georgia. He pleaded guilty to false oath 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)
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 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)
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)
WHAT MAKES AN INSURANCE COMPANY GOOD OR BAD?
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 you’re not covered by a policy
- 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
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.
1American Association for Justice (AAJ). The Ten Worst Insurance Companies In America. 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.
3Adriano, L. (18 March 2022). Allstate reveals plans to raise auto insurance rates. Insurance Business Magazine. 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.
5California Medical Association. (16 November 2021). UnitedHealth will repay providers underpaid for COVID-19 vaccine administration. Retrieved 14 April 2022.
6Totenberg, N. (6 December 2016). Supreme Court Upholds Hurricane Katrina Fraud Verdict Against State Farm. NPR. Retrieved 14 April 2022.
7Lawlor, Joe. (7 April 2022). Maine Medical Center will leave Anthem insurance network, citing overdue payments. Portland Press Herald. Retrieved 14 April 2022.
8Kelly v. Unum Grp., 2:20-cv-00622-JNP-DBP (D. Utah Mar. 21, 2022)
9Gibson, S. (1 April 2022). Georgia insurance company owner sentenced to prison for tax fraud. WRBL. 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.
12Adriano, L. (23 July 2018). Liberty Mutual, other insurers start dropping risky clients. Insurance Business Magazine. 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.
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.