... and Justice for All

Worst Insurance Companies: The Top Ten

The worst insurance companies in the United States were identified by the American Association for Justice (AAJ) following a comprehensive review and analysis of thousands of court documents, SEC and FBI records, state insurance department investigations and complaints, new accounts from across the country, and the testimony and depositions of former insurance agents and adjusters.  The AAJ's report The Ten Worst Insurance Companies in America; How They Raise Premiums, Deny Claims, and Refuse Insurance to Those Who Need It Most found that one company stood out above all the others and thus became the titleholder of the worst insurance company in America: Allstate.  The rest of the top 10 were as follows: Unum, AIG, State Farm, Conseco, WellPoint, Farmers, UnitedHealth, Torchmark and Liberty Mutual. 

AAJ's report includes some eye-popping statistics regarding the enormous profits reaped by the insurance industry and the huge reductions in claims payments:

• over $1 trillion in premiums is collected annually by the U.S. insurance industry
• the some $3.8 trillion in assets held by the U.S. insurance agency exceed the GDPs of all countries but the United States and Japan
• the property/casualty insurance industry has averaged annual profits of $30 billion the last 10 years
• the life and health insurance agency has also averaged annual profits of $30 billion over the last decade
• Allstate reduced the percentage of its claims payments from 79% of premium income to 58% from 1996 to 2006
• Allstate dropped its payout percentage on auto claims from 63% to 47% of premium income in the same period

There is a lot of money in collecing premiums and not paying claims.

Robert L. Abell
www.RobertAbellLaw.com

Disability Insurers Causing Overload of Social Security

    A growing backlog of pending claims for disability benefits from Social Security indicates that the Social Security system is being swamped through the actions of insurance companies compelling their insureds to file benefit claims with Social Security.  Most disability insurance policies have a provision that requires the insured to apply for disability benefits from Social Security and then allows, if that claim is approved, the insurance company to reduce the payment it makes to the insured.  Oftentimes, disability insurers refer their insureds to a law firm or company to help them with their claim to Social Security. 

    Approximately 2.5 million people apply annually for disability benefits from Social Security.  A recent study found that 18 percent of these applicants acknowledged being unqualified, because the standard to receive Social Security disability benefits requires that a person be unable to work in any job because of a total and permanent disability.  Typically, disability insurance policies pay benefits when a person is disabled from performing their last job, not any job.  Some insurance companies have stopped paying benefits where there insured has refused to file a claim with Social Security.  An interesting study of this practice and a pending lawsuit was reported as the lead story in the New York Times on April 2, "Insurers Faulted As Overloading Social Security." 

Robert L. Abell
www.RobertAbellLaw.com