Traits of the Worst Car Insurance Companies

Knowing the worst car insurance companies is important to make sure your coverage is worth the money. Third-party review sites can help you get accurate information about the worst car insurance companies.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 25, 2021

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Here's what you need to know...

  • People looking for car insurance need to consider more than just the overall cost
  • It’s a good idea to check out third-party review sites to get accurate information about your insurance choices
  • Online forums are also a great way to find out whether your insurance company is worth the money

People looking for car insurance tend to focus on this question: What is the best car insurance company? This, of course, is a good question, but sometimes it is also helpful to ask the opposite: What is the worst car insurance company?

Insurance companies put a lot of effort into appearing like their only goal is to serve you. Because that goal is not always true, it’s a good idea to note their flaws before signing contracts with them.

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What constitutes below average service?

 

Car insurance companies will post ratings on their websites, but because they have their self-interests in mind, these mostly consist of glowing testimonies of how great their policies and services are.

For this reason, you’d be better off checking out third-party sites such as J.D. Power and Associates, A.M. Best, and Standard and Poor’s that provide ratings for many insurance companies.

Many insurance companies may look the same on paper (or online), so it is tempting to choose the cheapest car insurance. Most times you don’t find out what you’re paying for until you have an accident and need to file a claim. Then you may have one or more of the following problems:

  • Slow response when you make a claim
  • Unwillingness to pay out when you make a claim
  • Raised insurance rates after an accident
  • Forced to use low-quality repair shops and to settle for second-rate work
  • Lack of compassion and not being viewed as an individual

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Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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How to Avoid Choosing the Worst Car Insurance Company

There are many ways to find out if the insurer you’re considering is the worst car insurance company to choose:

  • First, you could ask the owners or managers of local repair shops and see which companies they have trouble with. These people work with insurance companies frequently, so they’ll know what they’re talking about.
  • Next, find out what customers think. In 2005, Consumer Reports did a study of 27 insurance companies based on surveys from customers and wrote a detailed article about them. They haven’t done a major report about insurance companies since then, but it’s a good way to start.
  • Thirdly, check out online forums. People usually post reviews when they’re upset, so this is a good place to look.
  • Additionally, you can go to state websites to find their rating of car insurance companies. Each state has a department that regulates insurance companies.
  • Finally, get as many car insurance quotes as you can. They are free, and, when you have all the quotes, you can compare them yourself and eliminate the worst car insurance company.

Suggestions for Avoiding the Worst Car Insurance Company

 

Price is an important factor when shopping for car insurance, as is the type of car insurance and the amount of coverage you buy, but there are other aspects you might not consider before signing a policy just because it provides cheap auto insurance.

Ask about the company’s customer service department and make sure it’s responsive. You don’t want to be waiting around forever when you’re in the middle of a crisis.

In addition, learn how to file a claim. If there are too many hoops to jump through, you might want to look elsewhere.

Research how many claims the insurance companies approve and deny. This will give you an idea of the service they intend to provide.

The AAJ’s Study of the Worst Car Insurance Company

The American Association for Justice (AAJ) did a study of the 10 worst car insurance companies using data from court documents, files from federal agencies such as the FBI, and information from state insurance departments.

The AAJ found three qualities that the 10 worst companies share:

  • Firstly, despite using slogans that make it seem like the insurance carriers care about their customers, they are more interested in their profits than their service.
  • Secondly, they gain these profits by denying valid claims.
  • Thirdly, because of their unethical profit gain, workers’ salaries increase.

The AAJ named Allstate the worst car insurance company. The other nine in descending order were Unum, AIG, State Farm, Conseco, WellPoint, Farmers, United Health, Torchmark, and Liberty Mutual.

Allstate offered low compensation to people who made claims. The ones who accepted these amounts were helped with the “good hands” they promise in their slogan.

Conversely, Allstate fought with clients who held out for more money until they gave up and accepted the denial of their claim. In addition, Allstate agents were encouraged to lie to their customers in order to profit the company and were rewarded with bonuses for doing so.

Finding out which company has been deemed the worst will help you avoid bad service and exorbitant bills. This is especially true if the worst car insurance company is a well-known company like Allstate. Without researching their true nature, you might sign on with a company that has a good reputation only to find out that they lack quality customer service.

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