Before agreeing to a policy with an insurance company, it’s important to know their reputation. While many insurance companies promise to protect you in times of need, not all of them deliver. Some of the worst insurance companies in America are known to deny claims, underpay customers, and drag out the process when it’s time to pay.
All of these bad faith actions can leave you feeling helpless, especially when you're dealing with valid claims after an accident. Keep reading to learn more about the worst insurance companies for paying claims so you can make informed choices when buying a policy.
The first on our list of the worst insurance companies is Allstate. Allstate was founded in 1931 as a part of Sears. The company is headquartered in Northbrook, Illinois, and has over 10,001 employees and 58,221 associated members. Its services include car, home, life, motorcycle, business, renters, and condo insurance. Despite having a slogan that reassures policyholders that they are in good hands, Allstate is known for prioritizing their profit over the interest of policyholders.
Some documents made public by the company show that they allegedly encourage employees to fight against their clients, and they’ve been accused of using confusing policy language. This tactic misleads clients into believing they have coverage, only for their insurance claims to be denied. This insurance provider is widely regarded as one of the worst insurance companies.
Unum is an insurance company that offers disability and life insurance to clients. It was founded in 1848 as Union Mutual and was known as UnumOrividebt from 1999-2007. This insurance company is headquartered in Chattanooga, Tennessee, and has over 10,00 employees.
According to some customers, Unum delays or denies claims even when doctors confirm someone can’t work. In at least one case, they forced a man with a serious illness to fight for his benefits in court. This isn’t new for Unum– they’ve faced multiple lawsuits and bad press for how they treat customers. Even though they offer important services, these issues make many people think twice about choosing them.
AIG offers a variety of services, including life, retirement, property, and casualty insurance. It was founded in 1919 and is headquartered in New York with over 26,998 associated members and 25,200 employees.
A lot of people say AIG makes things extra complicated when it comes to paying valid claims. There have even been accusations that the company finds ways to wrongly deny claims, leaving people stuck when they need help the most. While AIG is great at making money, it’s allegedly not always great at keeping promises to customers. Many people end up having to fight the company just to get what they feel they’re owed.
State Farm has successfully become the highest-earning insurance company in the U.S. However, they gained this reputation while allegedly failing to pay the full settlement on every insurance claim. State Farm has over 57,00 employees and 10,000 members. Founded in 1922 and headquartered in Bloomington, Illinois, it is known for failing to pay valid claims of policyholders.
After disasters like Hurricane Katrina, there were complaints that State Farm tried to avoid paying claims by changing damage reports. Even high-profile individuals, like a U.S. senator, have had issues with the company. While they’re known for their wide range of services and massive reach, these stories show that even trusted companies can let their customers down.
Anthem is a health insurance company in the U.S. that operates under the Blue Cross Blue Shield Association. Formerly known as Wellpoint, Anthem was founded in 2010 and is headquartered in Indianapolis, Indiana. The company has over 1,000 employees and provides health insurance plans including employer-sponsored and individual coverage.
Anthem is another provider known for canceling coverage and denying payment on valid claims. Despite being reprimanded by the government, they allegedly still carry out the same bad-faith tactics. The company has received a lot of criticism based on allegations that it constantly cancels the policies of pregnant and severely ill policyholders.
Farmers Insurance Group is an American insurance company founded in 1928. It is headquartered in Woodland Hills, California. With over a million policyholders and approximately 21,000 employees, Farmers Insurance is a well-known name in the insurance industry. The company offers a variety of insurance services, including, life, home, business, and auto insurance coverage.
Despite its size and reputation, it has faced criticism for its claims-handling practices and is rated among the country’s worst car and home insurance companies. To gain more profit, the company allegedly offers incentives to its insurance adjusters once they meet their low payment goals. Some documents show that Farmers Insurance trains its employees to prioritize profits over the interest of policyholders.
United Health is the health insurance company for UnitedHealth Group. The parent company was founded in 1977 and is based in Minnesota. United Health serves more than 52 million customers and provides health insurance to both individuals and employers.
United Health is allegedly known for delaying and offering low reimbursement rates to their policyholders. Sadly, because of these low rates, patients end up paying their medical bills themselves. According to a report from the National Law Review, United Health claims to have a fair settlement system because it makes use of a separate company called Ingenix to handle claim calculations. But in reality, United Health owns that company too.
With over 3,000 employees and 3,977 associated members, Globe Life offers life and supplemental health insurance. It was established in 1900 and has its headquarters in McKinney, Texas. Globe Life markets itself as affordable and family-friendly, with policies that require little to no medical underwriting.
However, Globe Life has drawn criticism for allegedly charging minority customers higher premiums than their white customers, particularly for burial expense coverage. They also use many smaller companies to offer specialized policies, like cancer insurance, but these usually come with the same poor customer service that people say the main company provides.
Liberty Mutual is an insurance company that offers a variety of insurance services that cover home, auto, general liability, workers' compensation, and commercial properties. It's been in business since 1912 and is headquartered in Boston. Liberty Mutual has over 40,000 employees in 29 countries, and as of the end of 2024, its annual consolidated revenue was $49.4 billion.
Despite its impressive revenue figures, Liberty Mutual has earned a reputation as one of the worst car insurance companies for paying claims. They might not be as serious as All State and State Farm insurance companies in delaying and denying claims but they make use of these companies' services to reduce costs.
According to reports, Liberty Mutual has begun refusing policy renewals and discontinuing coverage for clients in high-risk regions, particularly areas prone to hurricanes or flooding. This action has left many of their customers subject to such disasters without proper coverage.
USAA is a well-known insurance company that also provides banking services. It was founded in 1922 by 25 U.S. Army officers who couldn’t get car insurance because of the way military officers were viewed at the time. USAA has over 37,000 members and serves members of the military and their families.
While USAA isn’t on the American Association for Justice’s (AAJ) list, it has a reputation for delaying insurance claims. These delays often work in the company’s favor as they allegedly make profits by holding onto the money they owe policyholders over a long time. Over time, frustrated policyholders may settle for less than they deserve just to close the case. In many instances, USAA allegedly ends up paying less than what’s fair.
Progressive, founded in 1937, is one of the biggest auto insurance companies in the U.S. They offer car, home, and motorcycle insurance, among other types of coverage. With over 55,100 employees, they’re a huge player in the insurance world. Progressive is known for its catchy ads which paint it as a friendly and helpful insurance company.
But even big companies like Progressive have their problems. Progressive has faced a variety of bad-faith claims from policyholders. They've also been accused of not settling claims for the severely injured children of policyholders.
Insurance companies often promise to help you during tough times, but sometimes, they focus more on their profits than helping their customers. That’s why it’s so important to research insurance companies before you choose one. Look into their claims process and read the customer reviews to avoid any unnecessary headaches.
If you think an insurance company isn’t treating you fairly, it may be acting in bad faith. In Texas, you can work with a bad faith insurance attorney to protect your rights. At Millin & Millin Attorneys, our team has experience handling cases like this. We’ll guide you through the claims process and help prove your insurance company acted in bad faith.
