How They Raise Premiums, Deny Claims, and Refuse Insurance to Those Who Need It Most

To determine the worst insurance companies in America, the American Association For Justice conducted a comprehensive investigation which included thousands of court documents, SEC and FBI records, state insurance department investigations and complaints, news accounts from across the country, and the testimony and depositions of former insurance agents and adjusters. The 5 worst insurance companies are listed below. To see the rest, and to read the entire report

1. Allstate
Profits: $4.6 billion (2007)
Allstates concerted efforts to put profits over policyholders has earned its place as the worst insurance company in America There is no greater poster child for insurance industry greed than Allstate. According to CEO Thomas Wilson, Allstate’s mission is clear: “our obligation is to earn a return for our shareholders.” Unfortunately, that dedication to shareholders has come at a price. According to investigations and documents Allstate was forced to make public, the company systematically placed profits over its own policyholders. The company that publicly touts its “good hands” approach privately instructs agents to employ a hardball “boxing gloves” strategy against its own policyholders.

2. Unum
Profits: $679 million (2007)
Unum, one of the nation’s leading disability insurers, has long had a reputation for unfairly denying and delaying claims. Unum’s claims-handling abuses have consistently been the subject of regulator and media investigations.

3. AIG
Profits: $6.2 billion (2007)
The world’s biggest insurer, AIG has a long history of claims-handling abuses for both individuals and business clients. AIG executives have also come under fire for opportunisticly seeking price increases during catastrophes. Now the company has been labeled “the new Enron” because of charges of multi-billion dollar corporate fraud.

4. State Farm
Profits: $5.5 billion (2007)
As the biggest property casualty insurance company in America, State Farm has become notorious for its deny and delay tactics. In many cases, the company has gone to extreme lengths to avoid paying claims, including forging signatures on earthquake waivers after the deadly Northridge earthquake, and altering engineering reports regarding damage after Hurricane Katrina.

5. Conseco
Profits: $179.9 million (2007)
Conseco sells long-term care policies, typically to the elderly. Unfortunately, Conseco uses the deteriorating health of its policyholders to its advantage because the company knows if it waits long enough to pay out claims, its customers will die.

6. WellPoint
Profits: $3.2 billion (2007)
WellPoint has a long history of putting its bottom line ahead of the welfare of its policyholders and their health care providers. Investigations have shown that Wellpoint routinely cancels the policies of pregnant women and chronically ill patients.

7. Farmers
Profits: Zurich Financial—$5.6 billion (2007)
Swiss-owned Farmers Insurance Group consistently ranks at or near the bottom of homeowner satisfaction surveys. Given its tactics towards its policyholders, that comes as no surprise. The company even created an incentive program that offered pizza parties to adjusters who met low payment goals.

8. United Health
Profits: $4.7 billion (2007)
UnitedHealth is plagued by accusations that its greed has endangered patients. Physicians report that reimbursement rates are so low and delayed by the company that patient health is compromised.Money that should have been spent on medical treatment for policyholders has instead gone to the company’s former CEO, who faced criminal and civil charges for backdating stock options. UnitedHealth has also used its association with AARP to jack up premiums on products aimed at seniors, even though they are no better than their cheaper counterparts.

9. Torchmark
Profits: $527.5 million (2007)
Founded, by its own admission, as little more than a scam, Torchmark has preyed upon low-income Southerners for over 100 years. Torchmark is the holding company for a variety of subsidiaries offering low cost burial insurance, cancer insurance, life insurance, and similar policies. The company has come under fire for a variety of transgressions, including charging minority policyholders more than whites.

10. Liberty Mutual
Profits: $1.5 billion (2007)
Like Allstate and State Farm, Liberty Mutual hired consulting giant McKinsey & Co. and adopted deny, delay, and defend tactics. The company has also gone one further than simple claims-handling abuses by indulging in what regulators allege is systematic bid-rigging.