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The American Association for Justice recently named the ten worst insurance companies in America based on claim denials, premium increases, and refusing insurance to consumers who need it most. Those top ten companies were, scarily, some of the most common household names:

  • 1. Allstate
  • 2. Unum
  • 3. AIG
  • 4. State Farm
  • 5. Conseco
  • 6. Wellpoint
  • 7. Farmers
  • 8. United Health
  • 9. Torchmark
  • 10. Liberty Mutual

Furthermore, overall, the AAJ made several conclusions about the insurance industry:

  • · Companies consistently put profits over policyholders—many insurance companies have catchy slogans such as “like a good neighbor” or “in good hands”, but fail to fulfill their promises when it comes to actually helping their customers when they need it.
  • · Companies continually deny, delay and defend—insurance companies make more money when they pay out fewer claims.
  • · Profits and salaries are skyrocketing—the property/casualty and life insurance industries average $30 billion in profits each year.

Many insurance companies are using the “profits over policyholders” approach. Simply put, insurance companies will do anything to gain profit, even at the expense of their policyholders.

In fact, the AAJ found that several insurance companies hired the consulting firm McKinsey & Company to help them “raise their bottom line”. Specifically, McKinsey helped each company come up with the ‘three D approach” to handling customers: delay, deny, and defend. Insurance companies were instructed to delay payouts, deny claims, and then defend themselves against lawsuits. Insurance companies essentially learned the value in using a litigation team to defend against lawsuits: it ends up being much cheaper than actually paying out when an insurance holder needs money for medical bills or other expenses.

Finally, insurance companies use the tactic of abandoning their policyholders: by identifying policyholders in calamity-prone areas, like hurricane-prone areas, insurance companies can avoid insuring these people and have also become much stingier in their claim payments to policies in regions affected by Hurricane Katrina.

The AAJ’s report demonstrates how important it is to know what you are getting when you purchase an insurance policy. Please be very cautious in signing an insurance agreement, make sure to read the fine print, and understand exactly what your insurance company will or will not cover.

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