Michigan’s Top Ten Worst Automobile Insurance Companies
July 23rd, 2008After a comprehensive investigation of thousands of legal documents, the American Association for Justice recently compiled a list of the worst insurance companies in America. Each of these companies writes auto insurance policies in Michigan. For Michigan automobile accident lawyers, the list is no surprise.
Deny, Delay, Defend
Topping the list as the worst insurance company in America is Allstate. Car accident victims in Michigan have been experiencing Allstate’s “good hands” for years as the insurer has denied and delayed payments, and then defended legitimate cases after forcing a lawsuit to be filed. Following close behind Allstate was Unum, AIG, State Farm, Conseco health insurance, WellPoint, Farmers, UnitedHealth, Torchmark and Liberty Mutual.
AIG, the insurer for many of the more serious truck accident cases in Michigan as they write many excess and umbrella layers of insurance coverage, is well-known among Michigan truck accident lawyers for its notorious bad faith approach to settlement negotiations until the eve of trial, and for refusing to make good faith offers to resolve serious truck accident cases early on. It is no accident that many of the better truck accident defense lawyers in Michigan refuse to defend AIG cases.
The consensus among most no fault insurance lawyers is that State Farm has become the worst first party auto insurance company in Michigan. State Farm puts many of its own insureds, who paid valuable premiums for protection if they were ever injured in an automobile accident, “under investigation” which has become the excuse for simply stopping all payment of medical bills and wage loss and refusing to disclose any reason to their own insured, forcing these people to hire a lawyer to sue for benefits that State Farm is legally obligated to pay.
Michigan accident and personal injury attorneys have become very familiar with Allstate’s “Deny, Delay, Defend” strategy, which has made national news and has been the subject of many news stories by organizations such as CNN. Allstate’s tactics have lately been copied many other automobile insurance companies on the list like State Farm and Farmers insurance. Insurers use this tactic to maximize profits for their shareholders and CEOs at the expense of policyholders. And the strategy works: The CEOs of the top 10 property/casualty firms earned an average of $8.9 million in 2007, and Allstate alone raked in a profit of $4.6 billion last year by collecting premiums and aggressively denying payments to policyholders.
Michigan Residents Are No Exception
These aggressive tactics have been especially prevalent here in Michigan, due in no small part to the Michigan Supreme Court, which has consistently favored auto insurance companies and made recovery for victims injured in car accidents in Michigan increasingly difficult. Without bad faith insurance laws, and devastating opinions like Devillers barring injured victims from recovery, insurance companies have few reasons not to deny, delay and defend in our state.
Still, Michigan lawyers do have some tools that can be used to hold at least some of these insurance companies accountable. By taking a claim to trial and proving that it is “overdue,” a lawyer is entitled to statutory interest and attorney fees. In the meantime, as groups like AAJ and the Michigan Association for Justice expose the bad insurance companies greed, we hope public support builds for legislative reforms to help curb practices that put profits ahead of policyholders.
October 14th, 2008 at 9:27 pm
I bookmarked your blog, thanks for sharing this very interesting post
December 7th, 2008 at 5:34 am
Casr Accident State FarmNo payout total loss
December 7th, 2008 at 5:35 am
Car accident State Farm Insurer nopayout to me as of yet
December 16th, 2008 at 9:22 pm
[...] a car accident. Andrew Bonkowski wanted an increased rate from the $19 an hour his no-fault insurer Allstate was paying [...]
January 8th, 2009 at 5:38 pm
Thanks for interesting article
January 9th, 2009 at 8:58 pm
[...] company tactic in Michigan that’s causing real harm to people injured in car accidents. Some Michigan insurance companies like Nationwide, Allstate and State Farm stop paying legitimate insurance claims for no reason, [...]
February 19th, 2009 at 8:43 pm
i need someone to respond regarding a matter of insurance in the state of michigan
March 2nd, 2009 at 5:27 pm
i have paid for my car insurance for 14 years and have always paid 6 months in advance. my last bill was for 300.00 more per year. i have never gotten a ticket or broke the law in any way. when i called my insurance agent, i was told because i don’t have a credit card that they can check my ratings, i am charged more. this makes me so angry. i have paid all my bills for 40 years and have never ever made a late payment EVER. i do not believe in them because this is why our country is in such a mess. here i am, being punished because i pay in cash. what a crock of SHIT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
April 20th, 2009 at 10:29 pm
I was involved in an accident last week in which the driver of a motorcycle didn’t see me when i was stopped to turn into my work. He ran right into the back of me. He was seriously injured. I was not injured. But i find out today through my insurance company that HIS medical bills will be PAID by MY INSURANCE!!! The accident was 100% his fault! How does this affect MY insurance rates! I am outraged that I (my insurance) is going to pick up HIS tab for HIS accident, which in turn makes everyones rates go UP! Unbelieveable law! And my hands are tied.
May 26th, 2009 at 11:52 pm
I am A Single Mom hit by drunk driver in the afternoon 5/18
State Farm wants to total my car, l lose a vehicle, owe $3800 more
to pay off loan, and am left with NO Car and a neck brace,
State Farm stands behind this policy and says I have no other options.
Why do I even carry insurance, if this scenario is possible and I end up
owing money , losing a vehicle, sustain a sprained neck injury and miss work
not to mention no rental car to transport my daughter and I.
Seems like the law abiding citizen is being punished, while the actual person
who broke the law is Protected…
What hav
TICE
May 28th, 2009 at 1:23 am
My wife and I have been with Allstate for at least 20 years, probably much more. We have a teenage driving-age son and daughter. In 2001 I turned in front of and injured a bicycler. In 2005 I did the same to an uninsured unlicensed kit hot rod injuring the 60+ year old passenger-owner and critically, nearly fatally injuring the 57 year old driver. I was sued for a huge amount and settled for a large amount. The minor damage to my car resulted in it being “totaled” because of it’s age. Allstate promptly (within a month) compensated the full blue-book price, minus deductable. They also held up their end of their feduciary responsibility. I hired a lawyer to work with Allstate’s lawyers, a move that paid off and kept them in line. A year and a half later, after the settlement, I was advised by a friend to drop Allstate before they dropped me. We didn’t, and neither did Allstate. Neither have our insurance rates increased even though in 2007 my daughter was the cause of a minor collision with the usual property damage claim (over $5K). Allstate has, for the MOST part, stuck with us, so we will stick with them. Could it be that it’s because we live in California that our experience with Allstate has been so different than the other blogs?
Ron and Karen,
born and raised in Grand Rapids, MI;
residents of Santa Barbara, CA for over 33 years.
June 8th, 2009 at 2:15 am
What does everyone in Michigan expect? Once they uttered the phrase “mandatory auto insurance”, the insurance companies came at us like a pack of drooling dogs.
Don’t count on anything changing either. The treat of fines/jail are all the insurance companies need to keep their racket going.
Where exactly do you think all that lobbying money comes from? Every payment you make to these companies out of fear and intimidation goes toward keeping the laws just the way they are. We’re giving them money so they may continue to screw us. How asinine is that???
Do you know what percentage of your premium is based on your credit score as opposed to your driving record? You should.
It’s time for the citizens of Michigan to take back control from special interest. Unfortunately, too many people have the fortitude of sheep to do the right thing - cancel your auto insurance in a peaceful, yet clear message that we are no longer going to stand for the abuses of the insurance companies.
So until that time, keep complaining - because that’s all that’s going to happen.
June 8th, 2009 at 8:59 pm
Thomas,
While I certainly understand your frustration with the greed and dirty hands of many insurance companies, I strongly advise against your recommendation of canceling your auto insurance policies. It is against the law in Michigan. And if you are injured in a car accident due to another driver’s negligence, you have absolutely no rights without auto insurance coverage. That means even if you are completely innocent, and you are rear-ended by a drunk driver and paralyzed for life, iyou cannot sue for your pain and suffering under Michigan law if you have no auto insurance. I agree the system is broken, but driving “bare” is not worth the harsh penalties you will suffer if you are involved in a serious car accident.
June 14th, 2009 at 1:40 am
Why is there no State or Local oversight of insurance companies policies or operation procedures. I know there is a State Agency that you can file a complaint with but they have no power over the insurance company.
This is a prime example of large insurance companies that pay lobbist and make campaign contributions to law makers, that write and pass the laws that protect the insurance companies and not the general public.
Isn’t it great paying all that money for madatory insurance coverage, and when you need to file a claim or better yet, someone files a claim against you that your insurance company will try to get out of their responsibilities of coverage for as less as they can and then they leave you open for a third party lawsuit.
Talk about being rode hard and being put away wet………
June 16th, 2009 at 6:45 pm
P.J.,
I agree that Michigan is sorely lacking in insurance company oversight and needs more. One welcome change, just this past month the insurance commissioner reinstated an old policy that new changes to insurance policies must be approved beforehand, which was dismantled during the Engler Administration. Michigan has no bad faith law, no punitive damages, and contract laws regarding auto insurance policy interpretation that allows insurance companies to get away with things that I am not aware of any other state allowing. Our laws on requiring permission on underinsurance policies is a great example where Michigan literally is the only state allowing insurance companies this kind of unchecked power.
June 16th, 2009 at 10:40 pm
I had a car accident on March 1,2003 and when 2 Trial and lost because my Attorney sold me out and was working not for me but again me and the Judge allow it 2 happen. Trial was Jan of 2006 could it be redress because the jury never view any evident before they made their decision I suffer with carpal tunnel neck and back also found out i had a fracture to my right leg from the car accident .
July 19th, 2009 at 7:45 am
insurance companies and the bastards that run them are the biggest scumbags ever they may be wealthy but it was not earned. they basicaly have a license to steal and that is complete bullshit. What is the idea of checking your t.r.w to calculate your premium. That has nothing to do with your driving habits .Personally i hope they all go belly up and the big cheifs loose everything.Because the money i make i have earned i don’t lie to people or cheat any body.These assholes have no concept of that
September 1st, 2009 at 5:47 pm
As a current victim of the auto ins co authorizing treatment and then denying it when it was completed, I would like to get invovled in reform. Who are the Judges that think it is o.k. for the insurance company to delay paying bills for a year because then they become the responsibility of the injured party? Who thinks it is o.k. that the insurance co can authorize treatment and then change their minds after the the fact? These people should not be re-elected.
Thank you,
J. Kula
September 10th, 2009 at 4:17 pm
Sadly Insurance is not a tangible thing you are buying. You are paying for a service you may or may not need. If you never use it they get to keep whatever money you paid and if you do use it you may see an increase in how much you pay. Your credit rating should not have anything to do with how much you pay but it does. The insurance companies figure that if you don’t pay your regular bills on time then you wont pay your insurance either and thus they charge you more because you will take more resources ( this is the assumption) than someone who does pay ontime and regularly. The good news is that they only consider that at the outset or when you quote. If you have had coverage with them (most of them) for 6 or 12months with no problems they will even lower your rates as you are then a better risk since you paid ontime and are a renewing customer. The longer you stay with a company the more loyalty bonuses you will get however if you then have an at fault accident you will see those huge increases. In Michigan if you are not at fault for an accident you will typically not see an increase in premium unless you insure with allstate- they apparantly count everything against you! As far as Michigan law goes- it is absolutely ridiculous! As someone pointed out if a motorcyclist hits you, your auto pip coverage will pay their injury regardless of who’s fault- here is the kicker- you just have to be an involved vehicle there doesnt even need to be contact between your car and the motorcyclist. That is nuts. Luckily though pip claims do not effect your rates in Michigan either so you should not see an increase because of pip coverage paid to anyone. You don’t “need” insurance however in this day and age going without it is just plain stupid. You could be personally sued for damage whereas had you had insurance they would owe to defend you etc… So don’t go without it but just contact your representatives, and senators- they work for you! Let them know about your complaints and ask them to make changes. Tell your friends to do the same. Make it clear you are not happy with the laws and they will eventually listen! Good luck to everyone- I empathize believe me!
November 4th, 2009 at 11:46 am
The Insurance companies try to justify rates by using those credit scores, why?
Young, good drivers are punished( thru rates)because they have yet to establish
a good credit score. Now that its even harder to get a credit score established
due to the economic conditions.No matter, college student, honor college, high
GPA, scholarship recipient,great driving record, no tickets, no claims, car sits
90% at school….no matter.. you are being taken advantaged of.Your rates in
Michigan…way to high, unaffordable, while tuition rates are up 5-10% each year.
I had insurance quotes from at least 5 companies-what a joke.You need to have
insurance, however.. you are driving college seniors-to want to leave the state.
The insurance companies are rates hikes have back fired- write to your
congressman,write letters to your present insurance company.Its hard to have
competition when the laws- credit scoring, castastrophic rates are LOCKED IN.
So, whats next, how do we save?
November 10th, 2009 at 8:32 pm
I was rear ended by a large commercial truck and it messed up my lower back more than it was. Hanover/Citizens is my car carrier.I reported my injury to them and they dragged their feet coordinating my STD with their policy. I intervened and sped things up a bit but still had no income for over a month.
Citizens paid a couple of checks, allowed me to have surgery then sent me a letter telling me they were “investigating the relatedness” of the accident to my injury. No doubt because I had a pre-existing condition even though they didn’t say that. No mention that they were also stopping my benefits. None of my correspondence with them was getting responded to. The original adjustor got changed. I called them a couple weeks after I got the letter and the adjustor told me she would see what was going on and call me back that afternoon. She lied, Never heard from her and that was 3 weeks ago. I filed a lawsuit last week.
24 years with them ( I just changrd my renters Ins. to another Co.) never a claim. By no fault of my own I get injured and when I need them most I get shut out. Just what I need to help me heal comfortably. This is just wrong.
Something needs to be done to make these insurance companies accountable. J. Kula (post above) I agree.
A. Morris
December 11th, 2009 at 7:39 pm
Michigan’s economy is in shambles and its residents keep moving out of state, which erodes the economy even further. Michigan has to make it more affordable and more appealing to live there. The way the insurance system is set up now, its a vicious circle for Michigan residents. Imagine, you are struggling financially to pay your bills, or you lose your job, missed mortgage payments so your credit gets dinged, then insurance goes up because its tied to your credit, so then you have less money to pay your bills, gas goes up, economy is tanking, more jobs being lost, etc., etc. Just goes round and round. The state legislatures need to find ways to relieve the financial pressure and burden on its residents. One way to do this is insurance reform. Michigan has to do something to keep its residents and attract more. Car accidents are a serious reality in Michigan because the weather is a major factor. Auto insurance reform should be a priority for state lawmakers. So please, write to your local representatives, and give them viable incentives for insurance reform (don’t just complain). I grew up in Michigan but now live in California. I’ve had to deal with auto insurance companies in both states. The laws in Michigan are ridiculous in comparison.
December 16th, 2009 at 2:23 pm
S.L., A sincere thank you for your thoughtful comment. Hopefully our readers will heed your advice and demand reform.
December 27th, 2009 at 2:49 pm
The entire insurance industry in Michigan needs reform; worker’s compensation system, home owners and automobile. I suffered injuries that left me disabled in 2006. I was in my own vehicle performing tasks for my company. I was insured by w/c, auto & bcbs but low and behold…no one wanted to pay! Each pointed the finger at each other as the responsible party for my medical expenses. I’ve been out of work for close to 4 years…3 1/2 without income until SSD finally stepped in and agreed that I was totally disabled. This didn’t matter to the insurance companies…auto and w/c want to blame my injuries on a pre-existing condition. Funny…up until the accident I never missed a day of work for this so-called pre-existing condition! Due to the financial stress of non-payments I’ve lost my home and am going through a divorce. The strain was much to much for my partner (shame of him). I used to love my State but after all I’ve been through I will look to find a state that recognizes the needs of their residents…not the interest of the greedy insurance sob’s. Michigan MUST stop complaining and insist on reform! Unfortunately, most people don’t realize this is happening until it hits home.
January 5th, 2010 at 2:23 am
We pay $128.40 per vehicle per year for “statutory assesments, including MCCA”. There are four vehicles on our policy; we are paying over $500 per year. Can you please explain what this charge is for? Only one of the rated drivers’ on our policy has any accidents or tickets - and it is so noted on the declaration certificate for that vehicle. I understand that she (adult daughter) must pay higher premiums because of an accident and driving record; but why are we paying this high amount on our other vehicles when the other three drivers do not have any accidents or points?
Is this a predetermined amount that everyone pays per vehicle?
January 8th, 2010 at 9:16 pm
MCCA stands for Michigan Catastrophic Claims Association and is often referred to as the “Cat Fund.” Because the Michigan No-Fault Act includes lifetime, unlimited medical expenses, when the No-Fault benefits paid by an insurer reaches a certain maximum limit, the insurer can seek reimbursement from the Cat Fund. This happens primarily when a claimant’s injuries are catastrophic. The current limit to reach the Cat Fund for policies issued between July 1, 2009 and June 30, 2010 is $460,000. The per vehicle assessment is adjusted each year based several factors which include the number of auto policies written and the estimated total amount needed to cover all catastrophic claims that year. The current per vehicle assessment is $128.40 and it applies to all drivers in Michigan regardless of driving record.
February 24th, 2010 at 2:37 pm
Auto Insurance By State
We collected detailed information about auto insurance law, rates and companies in each US state. Please click on on your state in order to find out more about auto insurance rates, law and companies in your state.
March 5th, 2010 at 3:41 pm
State farm tells me i have to take medical because Medicare will not cover me in a car accident (i have blue cross/blue shield as a supplemental insurance) i live in michigan. Is this true??
April 11th, 2010 at 2:42 pm
FRench assurance is not like that
but it’s good to know. Nice post!
May 19th, 2010 at 8:03 am
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June 14th, 2010 at 11:03 pm
Where is the list of BEST insurance companies? Currently, I have State Farm and am dealing with an issue. The 10 worst seem to be all of them that I know of. Who are the best, especially when I have a daughter who is a new driver?
June 23rd, 2010 at 11:44 am
My suggest will be that there is not such thing called the best insurance, mean you look out for what is good for you depending upon your needs and also one more thing all the laws are some so if some insurance company is giving a discount that means it is recovering the discount for some other thing or clause….
Kevin
June 23rd, 2010 at 7:24 pm
The worst thing about Michigan Insurance Companies is the fact that they do business there. The insurance laws in the state are ridiculous. If I owned an insurance company I would not be in business there. I used to handle claims and hated it when I got one from Michigan. Now I own an Auto Transport company and I try to avoid the state as much as possible. No Fault insurance is terrible for everyone except the person who chooses to take the $200 ticket if they get caught without it.
August 10th, 2010 at 1:48 am
Michigan has a whopping 38% of uninsured drivers on the road.
Michigan is ONLY state with UNLIMITED MEDICAL BENEFITS for LIFE!
Michigan has more rehab centers per capita than any other state because of the liberal benefits.
Michigan is one of the most generous states when it comes to Workers Compensation benefits
Michigan has the highest unemployment rate.
Once someone taps into the lucrative disability benefits there is no incentive to go back to work.
Unions have destroyed Michigans manufacturing base.
August 13th, 2010 at 10:58 am
American Family screwed me over and I found out that they were on the list of worst companies, after the fact, when it comes to claims. What are the 10 BEST Insurance Companies??
September 2nd, 2010 at 9:02 am
It is unfortunate of the mazes and loopholes the insurance company take you through…I’m going through something like this right now!
I do believe from the information that I’ve gathered about the UIM from this site is why I’m being held up for over a year now!
I’ve been in the dark this whole time….I’m so glad God directed me to this site!!!’ A Good mans footsteps are ordered by the Lord’!
It popped up on Facebook! I will be giving you a call tomorrow! Thank you so much for your honesty!
@Motorcycle trader: I would like to know the 10 Best Insurance Companies as well…
September 2nd, 2010 at 9:06 am
LITERALLY; HIGHWAY ROBBERY