Stephen Hasner | Car Accidents | November 2, 2021
Allstate is a well-known American insurance company that touts that you are “in good hands” with their team. Unfortunately, their history tells a different story.
According to the American Association for Justice (AAJ), Allstate is the worst insurance agency for consumers. It routinely puts profits and greed above the needs of its policyholders.
The tactics used by this company today stem from a business consulting company that Allstate hired in the mid-1990s. This company, McKinsey & Co., told Allstate that the best way to boost its profits was to reduce the amount of money it was paying out in claims — whether those claims were valid or not.
Like several other large insurance companies, Allstate uses a variety of tactics to delay or deny claims, even when they hold merit. Some of the tactics they use include:
Lying to Customers
One shocking item noted in the full AAJ report is that Allstate claims adjusters were told to lie to customers.
If a homeowner filed a claim because of a fire, for instance, the insurance adjusters were told to claim it was arson. Adjusters that followed these rules and lied to their customers were sometimes given gifts, rewards, and bonuses.
Perhaps the most common tactic used by Allstate is to present insurance policyholders with extremely low offers when they file a claim.
One customer noted that his auto repair was quoted at almost $3,000 by the dealership, yet Allstate offered to pay barely $200 for the repairs.
A homeowner who suffered roof damage in a hail storm was told the insurance policy wouldn’t cover the full cost of the damage because it wasn’t caused by hail, despite what the expert roofers said.
Each of these examples represents just a few of the reasons Allstate is listed as the worst insurance company for consumers in the United States.
Legal History of Claims with Allstate
Allstate has been the subject of more complaints than any other insurance company across the nation. They received double the number of complaints of any other insurance agency after Hurricane Katrina, despite holding fewer policies than other companies affected by the hurricane.
Similar problems with policyholder claims arose after massive wildfires destroyed over 2,000 homes in Southern California in 2003.
The company has also consistently defied legal orders to disclose documentation about its business practices and the changes that it made according to the McKinsey & Co. recommendations.
When they finally revealed some of the ordered documents in 2008, it was publicly noted that their practices reduced auto insurance claims payouts to just 47%, well below averages for other major insurance companies.
Bad Faith Insurance Companies
There is now a struggle in several states because Allstate is trying to cancel homeowner insurance policies illegally.
Louisiana, Florida, and California have each taken action of some sort against the company for nefarious practices.
Allstate tried to cancel the policies of some of its clients who were affected by Hurricane Katrina and other major disasters. In Florida, they may actively break state insurance laws by dropping homeowner policies if the customer does not also carry auto insurance with them.
When a company does not provide services to you as contracted, it is known as bad faith. Seeking the services of a skilled attorney can help you to navigate the insurance claims process and hold companies accountable for bad faith practices.