TOP TEN WORST INSURANCE COMPANIES IN AMERICA NAMED

AAJ Names Ten Worst Insurance Companies in America

The American Association of Justice (AAJ) has named the ten worst insurance companies in America based on claim denials, premium increases and refusing insurance to those who need it most. So, who’s on the list? Some of the names – and what they did to make the list – might surprise you.

How the report was conducted

According to the AAJ’s recent report entitled, The Ten Worst Insurance Companies in America – How They Raise Premiums, Deny Claims and Refuse Insurance to Those Who Need It Most, researchers investigated thousands of court documents, as well as records from the Securities & Exchange Commission (SEC), the Federal Bureau of Investigation (FBI) and state insurance departments. They also looked at news reports and testimony from the insurers’ former agents and adjusters. The report provides conclusions about the insurance industry as a whole, lists the ten worst insurers and explains why they made the list. To view the report, go to: http://www.justice.org/docs/TenWorstInsuranceCompanies.pdf.

Conclusions about the industry

The AAJ came to the following conclusions about the insurance industry as a whole:

• Companies consistently put profits over policyholders. The report concludes that many insurance companies may “talk the talk”, but don’t “walk the walk.” They may advertise that your “in good hands”, are “like a good neighbor” or “provide the strength to be there”, but fall short when it comes to actually serving their customers.
• Companies continually deny, delay and defend. Insurance companies make more money when they pay out fewer claims. Obvious? Yes. Ethical? No. The industry as a whole routinely denies, delays and defends claims – all in the name of the “bottom line.”
• Profits and salaries are skyrocketing. The property/casualty and life insurance industries average $30B in profits every year. In fact, the U.S. insurance industry as a whole receives premiums of over $1 trillion (with a “T”) every year and has assets of $3.8 trillion. The Chief Executive Officers (CEOs) of the ten insurers in the report averaged an annual salary of nearly $9 million in 2007.

Who made the list?

These ten companies were named the worst insurers in America for denying claims, raising premiums, refusing insurance to those who need it most and many other reasons:

1. Allstate - The "Your in good hands with Allstate" insurance company - Big in auto and homeowners insurance. History of delaying and denying insurance claims. Ranked the absolutely worst insurance company in America.   48% of Allstate's policy holders were very unsatisified and 12% unsatisifed.  Reported gross revenues of $29.4 billion in 2008 and a net loss of $1.2 billion.  Never fall for a company with a slick motto. Good hands, my ass. 
2. Unum - Leader in disability insurance. History of delaying and denying insurance claims. If you are an employer, you will love these people. 36% of Unum's policyholders were very unsatisifed, 9% unsatisifed - Reported gross revenues of just under $10 billion in 2008. Company profits $553 million or down 19% so their CEO took a salary cut.   
3. American International Group or AIG - AIG is the world's largest insurance company. History of delaying and denying insurance claims.  Known for denying automobile warranty claims (supposedly big in this segment) and practicing some very scrupulous business schemes. AIG insures some of the highest risk investments imaginable including hedge funds and Wall Street investment portfolios like sub-prime loan mortgages. Get the picture?  When Wall Street crashed in Sep 2008, AIG suffered critical liquidity problem and could not cover insurance claims. A worst case doomsday scenario. To date, AIG has received a combined total of $180 billion in TARP bailout loans, credit lines and buybacks of mortgage-based assets (i.e. subprime loans a.k.a. toxic assets) to keep the company afloat, all thanks to U.S. taxpayers. In spite of this, AIG executives had their annual meeting at an exclusive resort retreat and paid huge bonuses to its executives. They later paid most of those back.  This is the company that the FED said was "just too big to fail" and sent shivers throughtout banking and investment community.  They had to be saved or the U.S. economy could go into a depression.  51% of AIG's policyholders were very unsatisified, 10% Unsatisfied. Reported gross revenues of $11.1 billion in 2008 and a whopping net loss of $91.7 billion. This is as much as we paid for the Iraq War. Good work, AIG.  Sarcasm included for effect.   
4. State Farm - State Farm is the largest property casualty insurer in the U.S.- State Farm was notorious for its handling of homeowners’ claims related to Hurricane Katrina in 2005. Claims were routinely denied without basis and private home inspectors hired by the insurer have testified that State Farm told them to alter damage reports in order to avoid paying claims or pay less than the claims were worth. There's more.  State Farm hired McKinsey & Co, a Fortune 500 consulting firm, that recommended that they delay, deny and defend against insurance claims. Naturally, they followed McK's advice..34% of State Farm policyholders were very unsatisifed, 12% unsatisfied.  Reported gross revenues of $61.4 billion and a net loss of $1.7 billion in 2008. 
5. Conseco - Conseco is one of the nation's largest long-term care insurers. They basically insure senior citizens - The insurer has been accused of taking advantage of elderly policyholders who can’t care for themselves or fight back to receive their valid long term care benefits by delaying and denying claims. Have been repeatedly fined by insurance regulators for their illegal insurance claim activities. Imagine seniors who are near death, and the insurance company, says "NO". In my opinion, Conseco is the lowest of the low..57% of Conseco policholders were very unsatisfied, 21% unsatisfied. Reported gross revenues of $4.2 billion and a net loss of $1.1 billion in 2008.  
6. WellPoint - WellPoint is the nation's largest healthcare insurer. Provides healthcare insurance under the names Blue Cross and Blue Shield.  Sound familiar now?  Known for illegally cancelling health insurance policies, overcharging policyholders, engaging in fraudelent activity, and refusing to pay doctors. So if you are still happy with your health care insurance company, you are either very stupid, in denial or just don't get it. Health care insurance companies will screw you the very first chance they get. A very strong argument to reform the entire health care insurance industry.  55% of WellPoint policyholders were very unsatisfied, 31% unsatisfied. So basically 86% are not very happy with WellPoint. Reported gross revenues of $61.2 billion and a net profit of $2.5 billion.   
7. Farmers - Farmers is one of the nation's largest property, homeowners and auto insurers.  Known for engaging in unfair business practices (paying employee bonuses to decline or reduce amount of insurance claims), refusing to pay insurance claims in full and jacking up premiums after a claim is filed. I must confess they were my auto and homeowners insurance company. Known for cancelling or denying coverage to Katrina and Florida hurricane homeowners. They no longer provide homeowners insurance in Florida.  I really don't have anything nice to say about them, except stay away. These people are crooks.  41% of policyholders were very unsatisfied, 13% unsatisfied. Reported gross revenues of $61.6 billion and a net profit of $5.5 billion in 2008.     
8. United Health - United Health is one of the nation's largest healthcare insurance companies. Insures under the name PacificCare. They are big in California. Has been accused of misrepresenting insurance products (medicare extended coverage policies), denying and delaying insurance claims to policyholders and doctors, and have been continually accused of putting profits above the needs of the policyholders. United Health hoodwinked the American Association of Retired People (AARP) into a licensing deal for three of the most popular drugs used by seniors at lower prices. Turned out they lied. Those drugs cost more.  Another example of taking advantage of seniors. Another reason to reform our healthcare system. You can add them to my super slimo list. 65% of United Health policyholders were very unsatisfied, 13% unsatisfied. Reported gross revenues of $75.4 billion and a net profit of $4.7 billion in 2008.  
9. Torchmark - Torchmark is a holding company for subsidiary companies that sell low cost burial, cancer and life insurance policies. Underwrites policies under the names Globe Life and Accident Insurance Company, United American Insurance Company and Liberty National Insurance.  Any of those insurance companies sound familiar? Have been accused of discriminating against minorities (illegal race-based underwriting practices), lying to elderly policy holders by telling them their policy would be discontinued when they reached age 65, and engaging in fraudelent activities (mailing out phoney insurance offerings to seniors then selling them different insurance products).  If you are a senior or minority, Torchmark is looking for you. Avoid them like the plague. 50% of Torchmark policyholders were very unsatisfied. Reported gross revenues of $3.5 billion and a net profit of $527.5 billion in 2008.        
10. Liberty Mutual - Liberty Mutual, one of the nation’s largest insurers for home, auto and life insurance. Have been accused of delaying, denying and defending against paying claims, abandoning policyholders (hurricane damages suffered from Katrina and Florida hurricanes), and engaging in fraudelent activities (rigging insurance rates).  50% of Liberty Mutual policyholders were very unsatisfied, 12% unsatisfied. Reported gross revenues of $26 billion and a net profit of $1.5 billion in 2008. 

Insurance companies play by their own rules

It’s no secret that insurance companies often play by their own rules – especially when those rules specifically save the company money. A video has been posted on YouTube entitled “Insurance Company Rules.” It takes a satirical look at what would happen if the general public also used those rules. The video was a collaborative effort between Health Care for America Now (HCAN) and the Public Service Administration (PSA).

COMMENTARY:  Keep in mind that I am not the one trashing the insurance industry. It is the very policyholders who are trashing their own insurance companies. I am just the messenger. I have nothing to gain from this. I really put a lot of work into providing additioinal information not provided in the report.

With all the debate, point and counterpoint, about reforming the healthcare industry, it simply amazes me that something like 60% of Americans claim they are happy with their healthcare insurance and don't want anything changed. Just where the hell are those figures coming from?  Are Americans just that stupid?  Something is just not making sense.

The above healthcare insurance companies are among the biggest in the country, so chances are pretty good that your company made the list.  So you would think, that most Americans would be very unsatisified with their healthcare insurance company.

I don't want to turn this into a political podium.  But, let's at least admit one thing, that not only the healthcare industry, but the entire insurance industry needs to be reformed for denying, delaying, droppiing insurance coverage, discriminating by race, taking advantage of seniors and in some cases committing outright fraud. This is really disburbing and we all need to rise up and take strong action. 

There is just too much political posturing and favoritism going on here. A lot of hypocricy by both political parties, but the truth is all laid out for you. You be the judge.  If your insurance company made the Top 10 Worst Insurance Companies, but you are still happy with your insurance company, that's great.  Just realize that you are in the minority.

I leave with just one final thought.  There are probably some very good, socially responsible insurance companies that put their policyholders above corporate profits out there, but they are probably in the minority.  My next insurance article will include a list of the Top 10 insurance companies. 

Courtesy of the results of survey by the American Association of Justice (AAJ) appearing in Free Advice