In their marketing, insurance companies present themselves as being on the side of the customer. In reality, insurance companies are businesses. Accordingly, their goal is often to increase their profits and minimize their losses.

This is not meant to suggest that all insurance companies are untrustworthy. Insurers play an important role in the lives of injury victims. However, not all insurers serve their customers appropriately. Additionally, some insurers have been known to offer poor service.

Why Allstate May Be the Least Reliable Insurance Company

The American Association for Justice was formed in 1946 to fight for the rights of individuals filing claims and lawsuits.

One way the AAJ serves its purpose is by investigating insurance companies and determining which insurers fail to serve their customers properly. According to the AAJ, Allstate is the lowest-ranked insurance company in the U.S.

The AAJ cites numerous reasons for giving Allstate a low rating. The following are among the most significant:

  • In the 1990s, Allstate partnered with consulting firm McKinsey & Co. to develop a strategy to improve the odds of claimants accepting unreasonably low offers. 
  • Allstate has employed a “boxing gloves” approach to claims. When claimants are unwilling to accept low offers, the company puts up a fight to avoid paying them fairly.
  • Allstate has been the subject of a high number of complaints from customers who object to the company’s poor service.
  • There is evidence to indicate that Allstate adjusters are encouraged to engage in deceptive tactics. Some reports even indicate that adjusters who are able to reduce claims payments are offered bonuses.

Other organizations have also identified Allstate as a poor choice for consumers. For example, the National Association of Insurance Commissioners has also investigated the issue. They have found that Allstate consistently receives more complaints than nearly all of its competitors.

Allstate has also been fined heavily for its bad faith practices. In fact, Allstate received the largest fine in Maryland history when it was discovered that Allstate was overcharging homeowners and raising premiums without notifying its customers. The company was forced to pay $70 million. 

Allstate also has a history of engaging in questionable practices in times of emergency. Many residents of the Gulf Coast region were desperate In the wake of Hurricane Katrina. Allstate nevertheless denied legitimate insurance claims from those who had lost their homes.

Why is Allstate Unreliable?

It’s unclear why Allstate has continued to engage in shady business practices despite being fined on multiple occasions. However, it is worth noting that Allstate is not unique. Again, there are certainly instances when insurance companies do their duty and serve their customers as they should. That said, insurance is a unique business.

Most businesses charge you when you use their services. With insurance, the opposite is the case. An individual or entity pays to retain an insurance policy. If they ever need to use it, the insurance company is supposed to pay.

This system has naturally resulted in problems. Businesses never want to lose money. Companies such as Allstate prioritize taking steps to limit how much they have to pay out to claimants. This has sometimes manifested in practices that are ultimately not customer-friendly.

That doesn’t mean that someone who has an insurance policy with Allstate has no options. For example, perhaps you’ve filed a claim to collect from Allstate after a car accident, motorcycle accident, or another similar incident. You can improve your chances of collecting compensation by hiring an attorney. 

Lawyers understand how companies like Allstate defend themselves financially. Thus, they are prepared to help you guard against their tactics. Keep that in mind if you ever need to collect from Allstate.