Which insurance companies are the least responsive to their customers in the United States?
According to the 2022 Customer Satisfaction Index, there are some insurers that have earned the hatred of U.S. consumers after failing to satisfactorily resolve their claims.
When a person takes out any insurance, be it auto, homeowners, life or otherwise, they do so with the vision that it will help them financially in the event they need it, such as in the event of an accident. On the contrary, more and more clients are complaining that insurance companies are not fulfilling their obligations. One study has already identified the insurance companies most hated by U.S. consumers.
The U.S. Customer Satisfaction Index 2021-2022 Insurance and Healthcare Study, which surveyed 12,841 people between October 2021 and September 2022 about their satisfaction with different insurance companies offering property and casualty insurance, found which insurers are the most likely to default on their customers when they make a claim. The company’s profits and revenues come from the most recent financial statements.
In theory, a person takes out insurance of some kind, paying a monthly premium, to be financially protected in the event of an accident, illness or other adverse circumstance. If any of this should happen, the insurer should bear most of the expenses. In some cases, the customer must pay a deductible in order for the full cost of the settlement to be covered, such as the full charge for a medical bill.
Obtaining payment of a legitimate claim can sometimes be a lengthy battle that is filled with paperwork, physical chasing and phone calls. For those already dealing with the aftermath of an accident, theft or natural disaster, it seems unfair to have to fight for compensation. And it seems even more unfair when insurance companies generate more than $8 billion a year in revenue.
ACSI surveyed customers about different aspects of their experience with their insurance companies. The categories with the lowest rate of customer satisfaction were the availability and range of policy discounts and rewards, the ease of understanding statements, the speed of processing and completion of most recent claims, and the courtesy and friendliness of representatives and agents. For these categories, about 75% to 78% of customers were satisfied.
These are the insurance companies most hated by Americans because they are largely unsatisfied with claims and lacking in service:
1. Farmers
Farmers Insurance Group is the most hated insurance company in the United States. The insurer was founded in 1928 and now also offers other financial services in addition to insurance. Since 2005, the group has settled at least five lawsuits ranging from discrimination to bad faith. In 2022, it had a 75% customer satisfaction rating.
2. Progressive
The Progressive Corporation is the largest commercial auto insurer in the United States. Founded in 1937, it has a customer satisfaction of 76% in 2021 and 2022. In 2012, the company faced public criticism for its attempt to avoid paying a claim after one of its customers died in a car accident.
3. Nationwide
From 2021 to 2022, customer satisfaction dropped by one percentage point to 76%. And this can be understood when, in 2014, Nationwide was forced to pay $18 million in punitive damages for failing to negotiate in good faith. Nationwide Mutual Insurance Company is a group of insurance and financial services companies.
4. GEICO
GEICO or Government Employees Insurance Company is an insurance subsidiary of Berkshire Hathaway, the company owned by well-known investor Warren Buffett. Despite the name, it was never affiliated with the government, but was originally founded to sell auto insurance to federal government employees. In 2019, the company was ordered to pay $1 million for acting in bad faith. GEICO has a customer satisfaction rating of 77%, up from 79% in 2021.
5. Travelers
With a customer satisfaction rating of 78%, Travelers is a New York-based insurance company, despite being incorporated in Minnesota and currently publicly traded. In 2007, the company settled a $6 million class action lawsuit alleging that it had engaged in anti-competitive practices designed to deceive customers.
6. Allstate
It has a customer satisfaction rating equal to Travelers, although it has a higher popularity rating. The company was created in 1950 as part of Sears, Roebuck and Co. In 2020, Allstate was criticized for using a secret algorithm that identified customers who were unlikely to shop around for a better deal and therefore could be charged excessive rates.
7. Liberty Mutual
Liberty Mutual is the sixth largest property and casualty insurer in the world. The company is based in Boston, and in 2012 and 2013, the Boston Globe published a series of articles about the insurer, exposing excessive executive compensation and weekend travel on long-haul corporate jets. It has a customer satisfaction rating of 79%.
8. American Family
Known as AmFam, it is a mutual insurance company that has a customer satisfaction rating of 79%. So far there are no recent controversial issues with this insurer.
9. State Farm
State Farm, the largest insurance company on this list in terms of revenue, is a group of mutual insurance companies: insurance companies that are wholly owned by policyholders, and profits are returned to policyholders through dividends or refunds. Possibly for this reason it has a customer satisfaction level of 80%.
The insurer has been involved in many scandals and lawsuits related to insurance settlements, discrimination and more. One of the company’s biggest scandals was when it reached a $250 million settlement just before a civil racketeering trial, where customers claimed that the company tried to manipulate the Illinois justice system. The company always denied the charges.