In theory, purchasing insurance should provide financial protection against a particular loss. On one side of the contract, the customer pays a premium over time to the insurance company in exchange for financial coverage in the event of an accident, illness or other contingencies. On the other side of the contract, the insurance company is supposed to pay up when an incident happens. However, it is not always that simple.
Insurance functions like a big pot of emergency funds. Most customers put money in the pot but will never need to use it. These customers make the company money. The customers who submit an insurance claim to take money out of the pot often need significantly more money than they put in. These customers cost the insurer money, and it is in the company’s financial interest to avoid paying.
Simply put, insurance companies don’t make money by paying out claims. Getting a legitimate claim paid can sometimes be a long struggle filled with paperwork, phone calls and delays. For those already dealing with the consequences of an accident, robbery or natural disaster, fighting to be fairly compensated can be exhausting. (Also look out America’s Most Hated Companies.)
To identify the most hated insurance companies, 24/7 Wall St. the American Customer Satisfaction Index’s revision Insurance and Healthcare Study 2021-2022, which surveyed 12,841 people between October 2021 and September 2022 about their satisfaction with different insurance companies offering property and casualty insurance. Company profits and revenues come from the most recent financial statements.
The ACSI surveyed customers about different aspects of their experience with their insurance companies. The categories with the lowest rate of customer satisfaction were availability and scope of policy discounts and rewards, easy to understand account statements, speed of most recent claim processing and completion, and courtesy and helpfulness of representatives and agents. For these categories, approximately 75% to 78% of customers were satisfied.
Customers were most satisfied with the quality of their insurers’ mobile apps, the reliability of the mobile apps and company websites, with approximately 83% of customers satisfied in these categories.
The most hated insurance companies vary in size, but all bring in more than $8 billion a year in revenue and are Fortune 500 companies. Over the years, many have had controversial policies and positions, or they have taken controversial actions. Others have had legal problems because they negotiated in bad faith or failed to pay claims. (Oldest companies in the Fortune 500)
Click here to see the most hated insurance companies in America.