If you own a vehicle, most states legally require you to purchase some type of car insurance, and each state has a different minimum coverage requirement. New Hampshire and Virginia are the only two states in the country that don’t require car insurance.
With all the choices out there, it can be difficult to find the best insurance for your needs. You want to choose a company with great coverage, premiums that aren’t too expensive, and good customer service. And above all, you want a company that will stick by your side during the claims process, which is when you need them the most.
But how can you find out which car insurance company is going to treat you right and not charge exorbitant amounts of fees?
To hopefully help narrow down your many options, we’ve compiled a list of what are considered to be the top 10 worst car insurance companies in the United States. These rankings are based on customer satisfaction, denial or approval of claims, cost of premiums, and more.
Here’s what we found:
1 – Allstate
We’ve all heard the slogan “Are you in good hands?” and decades of complaints show that a great number of Allstate policyholders are not. According to a 2008 report (the most recent available) from the American Association for Justice (AAJ), Allstate was ranked as the worst insurance company in America by putting company shareholders before policyholders.
It seems that still holds today as many consumers have said that Allstate consistently denies and lowballs claims, and agents lie to their customers and are often intentionally unhelpful. With the company consistently ranking at the top for worst auto insurance companies, you may want to avoid using them.
2 – AIG
American International Group (AIG) has long been one of the largest insurance companies in the United States and has been given the nickname “the new Enron” because of charges of multi-billion-dollar corporate fraud. AIG has employed many abusive claim denial strategies, doesn’t communicate effectively with policyholders, and has been known to charge far more for premiums than it pays out in claims.
Many consumers also claim that AIG phone representatives are uninformed and often give out different answers to the same questions, making the company unreliable to prospective new policyholders.
3 – State Farm
Even with its history of failing to renew policies, “good neighbor” State Farm remains one of the largest car insurance providers. They also follow bad practices like Allstate for claims processing by denying claims, delaying payments owed to policyholders, and defending these decisions with lawsuits. Repair centers approved by State Farm frequently use poor-quality parts, and policy contracts are known to be confusing to policyholders.
4 – Farmers Insurance
Notorious for giving low claim payouts, Farmers Insurance has also been known to train its adjusters to prioritize profits over the interests and rights of policyholders, offer incentives to employees who succeed in low payouts, and intentionally create an overall frustrating claims process. Consumers consistently rank Farmers Insurance as one of the worst car insurance companies in the United States.
5 – Liberty Mutual
As with previously mentioned insurers, Liberty Mutual denies and delays claims as much as possible, even valid ones. It has seen its fair share of customer complaints, has a history of facing litigation from policyholders, and has been accused of wrongfully denying policy renewal for policies considered at risk of submitting claims.
6 – Progressive
In recent years, Progressive has faced numerous court cases for bad faith insurance claims, some of which have since been settled while some are still ongoing. Progressive allegedly failed to effectively settle multiple claims involving serious injuries to children that Progressive policyholders caused. Their commercials are funny and make the company appear to be customer-forward; however, that is not always the case.
7 – Travelers
Another one of the largest auto insurance companies in the United States, Travelers prides itself on having a wide variety of coverage options. However, customer satisfaction is on a downward trend for Travelers as they ranked well below the national expected average regarding both auto insurance shopping and claims. The company is considered one of the most affordable options available if you want to risk issues with claims that may arise.
8 – Nationwide
Nationwide is not always “on your side,” as their slogan says, due to many policyholders in recent years complaining about poor customer service, claim denials, and sudden unexplained policy cancelations. Nationwide offers a wide variety of insurance options, discounts, and customizable policies, but it’s one of the most expensive car insurance companies available, and their uptick in poor customer service is not to be ignored.
9 – GEICO
Known for giving a lot of great discounts to policyholders (like safe drivers, military members, good students, etc.), GEICO offers affordable policies, but they have few local agents to handle claims that arise. Recently, there have been numerous complaints against GEICO regarding unexplained changes in policy premiums, unfair determinations of fault in accidents involving GEICO policyholders, and charging policyholders hundreds of dollars after refusing to cancel policies as requested by the policyholders.
10 – USAA
Most military families are familiar with the United Services Automobile Association (USAA), as the company takes pride in offering the best coverage for military members and their families. However, USAA is notoriously difficult to deal with, and one of their main tactics is delaying claim processing. By doing so, the company puts financial pressure on its policyholders, hoping they will settle for far less than they should to get the claim over with. That being said, USAA has decent customer service and offers discounts to accident-free drivers.
You likely recognized most or all of the names on this list, and you may be wondering how these big companies are still so popular if they’re really that bad. The fact of the matter is that drivers and car owners still need coverage, even just the bare minimum, and most people can’t afford to be too choosy with the company they decide to use, so they settle for what’s within their budget.
These companies make so much money. For example, State Farm netted $74.3 billion in earned premiums, and Allstate netted $43.9 billion in earned premiums in 2022, so overall customer satisfaction or claim denial issues are minimal losses for them. They can afford to pay out and treat their customers better but choose not to.
With this knowledge, we hope you’re able to find the right insurance coverage for your needs – and avoid the companies that will likely take advantage of you. And if you’re struggling with a current claim after a car accident in South Carolina, we want you to know that our firm at The Solomon Law Group can help.
