Here are the reasons Allstate (and Esurance) made our Michigan Auto Law attorneys’ list of the 2015 worst auto insurance companies in America
I’ve been putting together our list of our attorneys’ worst insurance companies for many years now. And Allstate always makes our list.
In 2015, the insurance giant did not disappoint. Allstate is taking a well-earned spot near the top of our list.
It’s not one of our eight reasons, but automobile accident attorneys don’t like Allstate very much (perhaps this is correlated with our eight reasons below). I speak at legal seminars across the nation, and if there were a poll or a vote, I believe Allstate (and State Farm) would be voted the worst and second-worst insurance companies by auto accident lawyers across the nation.
Our full guide includes more information on each insurer and tips on how to choose the insurance company that’s right for you and your family. You can order a hard copy of the guide or download it for your Smartphone.
How attorneys feel about Allstate isn’t a reason customers should avoid Allstate and Esurance, an Allstate company. But here are eight reasons insurance consumers can do better:
1. Allstate charges 116% more to consumers with ‘no credit’ than those with ‘excellent credit.’
In its “2014 Car Insurance by Credit Score Report,” consumer website WalletHub reported that Allstate had “a 116% fluctuation in [auto insurance] premiums” between the prices charged to consumers with “excellent credit” and those with “no credit.” For more information, please take a look at Michigan Auto Law’s blog post, “How do credit scores punish Detroit residents when paying for auto insurance?”
2. Allstate charges auto insurance prices that are 39% higher to consumers with ‘poor’ credit scores.
Research by the Consumer Federation of America (CFA) shows that Allstate charges drivers “with poor credit scores much higher prices” for auto insurance – approximately 39% higher – “than drivers with excellent scores,” according to a press release announcing the publication of CFA’s report, “The Use of Credit Scores by Auto Insurers: Adverse Impacts on Low- and Moderate-Income Drivers.” For more information, please check out my blog post, “Why State Farm and Allstate will charge you more for auto insurance if you have a poor credit score.”
3. Consumer complaints against Allstate and Esurance keep increasing.
- Complaints from Michigan consumers against Allstate Property & Casualty Insurance Company have increased. Consumer complaints against Allstate Property & Casualty Insurance Company increased 350% between 2007 and 2013, according to data gathered by the Michigan Department of Insurance and Financial Services (DIFS).
- Complaints from Michigan consumers against Esurance have increased. Consumer complaints against Allstate’s “protégé,” Esurance Insurance Company, increased 133% since the company’s acquisition by Allstate in 2011, according to data gathered by the Michigan Department of Insurance and Financial Services (DIFS).
- Complaints from Michigan consumers against Esurance Property and Casualty Insurance Company have increased. Consumer complaints against Allstate’s “protégé,” Esurance Property and Casualty Insurance Company, increased 1,050% since the company’s acquisition by Allstate in 2011, according to data gathered by the Michigan Department of Insurance and Financial Services (DIFS).
4. Esurance tried to dupe an injured auto accident victim who was not represented by a lawyer into accepting a low-ball $500 auto accident settlement.
Then the insurer settled the claim for $20,000 (just 3,900% more) after the victim retained a lawyer.
Here’s what happened: Less than two weeks after a motor vehicle collision caused by Esurance’s insured customer, Esurance (“an Allstate company”) tried to take advantage of the unrepresented individual. The crash victim had been seriously injured in the collision.
How did Esurance treat its customer? By making a low-ball settlement offer of $500.
Shortly after, when Esurance learned the crash victim had retained a lawyer (who happened to be Brandon Hewitt, an auto accident lawyer with Michigan Auto Law), Esurance withdrew its low-ball settlement offer.
Six months later, Esurance settled the case. But even though it was the exact same case that it had just offered $500 to settle previously, it now settled the case for $20,000 – which was the entire insurance bodily injury and liability policy limits for the Esurance’s insured customer.
In other words, Esurance settled the collision victim’s case for 3,900% more after the victim retained a lawyer. It raises the question: Just how many other Esurance customers are Allstate and Esurance low-balling and making unreasonable settlement offers after bad car accident injuries?
To learn more, please read Michigan Auto Law’s blog post, “Esurance makes case for why auto accident victims need attorneys.”
5. Allstate’s defense lawyers act in bad faith in car accident lawsuits – with serial requests for facilitations to delay cases.
Allstate’s insurance defense lawyers seem to have recently rolled out a new stalling tactic in car accident lawsuits. This tactic is to seek repeated postponements and delays of cases by pushing plaintiff attorneys and their injured clients to agree to a “facilitation,” which is a form of alternative dispute resolution that is also known as mediation in many states.
This would be fine, of course, assuming the insurer was entering into facilitation with the intent actually acting in good faith to try to settle the case.
However, after the auto accident victim and her lawyer have invested substantial time and money in preparation, and after months of delay in scheduling, the parties show up for the facilitation only to find no Allstate adjuster is present and the Allstate lawyer has no settlement authority to settle the case.
Allstate has successfully pulled off this trick with many personal injury lawyers, both in Michigan and throughout the country.
But not all of them.
When Allstate tried it with a Michigan Auto Law client, attorney Josh Terebelo had the insurer sanctioned by the trial court judge for its “bad faith” approach to facilitation.
The judge ordered Allstate to pay for all the attorney fees and for the facilitator’s fees for the wasted facilitation.
For more information on how your own attorney can protect you if Allstate is pushing for mediation or facilitation in a car accident lawsuit, take a look at my blog post, “Has Allstate stood you up at a facilitation or mediation?”
6. Allstate pays the fourth-smallest percentage of premiums on claims.
This is a glaring red flag if you’re an insurance consumer.
Among Michigan’s largest auto insurers, for instance, Allstate Insurance Company paid the fourth-smallest percentage of its premium dollars in claims for its auto-insurance customers, according to loss ratio data gathered by the Michigan Department of Insurance and Financial Services (DIFS).
For instance, for every premium dollar Allstate Insurance Company receives from Michigan drivers, it pays out approximately $.62 in auto accident claims submitted by its auto-insurance customers.
*Data was not available for Allstate Property & Casualty Insurance Company or Esurance Insurance Company (for years after its acquisition by Allstate).
7. Allstate and Esurance receive “Below-average” ratings from J.D. Power & Associates.
- Allstate received a below-average rating in the J.D. Power 2014 U.S. Auto Insurance Shopping Study. Allstate received a below-average rating in the J.D. Power 2014 U.S. Auto Insurance Study, which ranks auto insurers based on “overall customer satisfaction with auto insurance companies …” Allstate’s below-average performance was marked by its “The rest” rating, which is J.D. Power’s lowest rating. “Among the best” is the highest J.D. Power rating. “Better than most” is the second-highest. “About average” is third. And the lowest is the below-average rating of “The rest.”
- Esurance (“an Allstate company”) received a below-average rating in the J.D. Power 2014 U.S. Auto Claims Satisfaction Study. Esurance (“an Allstate company”) received a below-average rating in the J.D. Power 2014 U.S. Auto Claims Satisfaction Study, which ranks auto insurers based on “[o]verall customer satisfaction with the auto insurance claims process …” Esurance’s below-average performance was marked by its “The rest” rating, which is J.D. Power’s lowest rating. Notably, Esurance also received below-average ratings from 2011 (when Allstate acquired Esurance) through 2013.
8. Allstate also has consistently low consumer ratings from ConsumerReports.org.
Allstate received the third-lowest ConsumerReports.org rating among Michigan’s largest auto insurers.
Among Michigan’s largest auto insurers, Allstate Insurance Company received the third-lowest score in ConsumerReports.org’s 2014 “Car Insurance Ratings,” which measures ConsumerReports.org’s readers’ “overall satisfaction” with auto insurance companies.
NOTE: Our lawyers have grouped Esurance (“an Allstate company”) into our discussion about Allstate today. According to its website, www.esurance.com, Esurance presents itself as being very closely aligned with Allstate:
“Esurance, an Allstate company,” “As a member of the Allstate family, we’re backed by the strength, commitment, and experience of a long-time industry leader,” “Esurance is backed by Allstate, the largest publicly held personal lines insurer in the U.S. With their 80-plus years of experience and superior financial strength behind us, you know you can count on Esurance for car insurance coverage you can rely on.”