Dealing with denied insurance claims can be frustrating and worrisome. When researching insurance companies, it is crucial to consider their track record and how they handle claims. In this article, we shed light on what are considered to be the 10 worst insurance companies in the United States for denied claims in the life insurance industry. This updated list aims to provide valuable insights for policyholders, allowing them to make informed decisions about their life insurance coverage.
- ALLSTATE: Allstate, led by CEO Thomas Wilson, has faced criticism for prioritizing shareholders over insured parties with claims. Recently, the company announced a rate increase of approximately 5.1%, generating an estimated $1.2 billion in additional premiums (Insurance Business Magazine).
- PROGRESSIVE: Progressive Insurance has been accused by Georgia insurance officials of undervaluing and cutting corners on claims. The concern revolves around the calculation of taxes paid to insured parties, based on the cash value of the vehicle. Progressive has adjusted their practices to comply with state oversight on the issue (CBS 46 News).
- UNITEDHEALTH: Federal investigators have discovered that UnitedHealthcare underpaid reimbursements for COVID-19 vaccines. The insurer’s payments were below the Medicare rate of $40 per vaccine, hindering healthcare providers from covering the cost of administering vaccines (California Medical Association).
- STATE FARM: Despite its motto of being a “good neighbor,” State Farm faced a fraud verdict upheld by the United States Supreme Court. The ruling revealed that claims adjusters wrongly classified wind damage as flood damage following Hurricane Katrina, leading policyholders to blow the whistle on the company’s practices (NPR).
- ANTHEM: Anthem Insurance has faced criticism from a medical center in Maine, which decided to sever ties due to over $70 million in unpaid claims to the MaineHealth network. This move could impact more than 150,000 people, forcing them to pay higher out-of-network rates (Press Herald).
- UNUM: As one of the leading disability insurers, UNUM has been subject to litigation for denying long-term disability benefits. A recent court ruling favored UNUM, dismissing claims that the company used incorrect standards in determining benefit eligibility (Kelly v. UNUM Group, D. Utah).
- FEDERAL EMPLOYEE BENEFITS: Federal Employee Benefits, a lesser-known insurance company, faced legal issues when its founder, Jaques Andres Frym, pleaded guilty to false oath and false tax documents. The company’s ownership and income were misrepresented, resulting in fines and restitution (WRBL).
- FARMERS: Farmers Insurance Group was ordered to pay a former executive a significant sum after being found guilty of improper termination. The verdict revealed retaliation against the executive for being willing to testify in a pay bias lawsuit filed by female in-house lawyers (Coates v. Farmers Insurance Group Inc., Bloomberg Law).
- LIBERTY MUTUAL: Liberty Mutual has faced criticism for non-renewing policies, especially for homeowners at risk of wildfires. Critics argue that the company drops customers it deems high risk, even if they have been loyal policyholders (Insurance Business America).
- USAA: While USAA positions itself as military-friendly, concerns have been raised about CEO Wayne Peacock’s substantial earnings while the company reports billions in profits. Furthermore, a class-action lawsuit alleges that USAA wrongfully declared policyholders’ vehicles as total losses, revoking their titles and designating them as salvage (Repairer Driven News).
Understanding the reputation and practices of insurance companies is crucial when selecting life insurance coverage. The 10 companies mentioned here have faced criticisms and legal challenges related to denied claims in the life insurance industry. However, it is essential to conduct thorough research, consult with professionals, and consider individual circumstances to make informed decisions about insurance providers.
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.
15Life Insurance Law (June 3rd 2023) Lincoln National Life Insurance Claim Denied? How to Appeal and Win
