Our research has primarily focused on finding the best auto insurance companies, but along the way, we also found some less-than-stellar options. In our search, we narrowed down three insurance companies that have high insurance rates and dishonest claims processes.
If you’re in the market for new auto insurance and want to know which providers to avoid, take a look at our top three choices for the worst car insurance companies. Below, you’ll also find recommendations for the best auto insurance providers. Just enter your zip code and get free insurance quotes.
1. Allstate: Denies Claims to Bring in More Revenue
Allstate’s slogan, “Are you in good hands?” portrays the company as a business that cares about its policyholders, yet on many legal publication sites Allstate is frequently mentioned on lists for the worst companies in the car insurance industry. In fact, Allstate has a history of:
- Lowballing claims
- Denying claims consistently
- Lying to customers
- Intentionally being unhelpful
A report by the American Association for Justice (AAJ) confirms these issues through the quotes of past employees at Allstate. According to the report, former claims adjuster Jo Ann Katzman said, “We were told to lie by our supervisors. It’s tough to look at people and know you’re lying.”
The report also covers the common strategy demanded of Allstate agents to bring in more money. Claims adjusters are supposed to offer an incredibly low payout to the claim, and if customers fight against this, adjusters essentially force them to wait so long that they just give up. There’s even a known catchphrase among Allstate adjusters: “Deny, delay and defend.”
2. American International Group (AIG): Incorporates Many Abusive Claim Denial Strategies
This same report mentioned AIG, and went over the lengths AIG employees would go to so as not to approve claims. Some of these tactics included,“locking checks in a safe until claimants complained, delaying payment of attorney fees until they were a year old, […] and routinely fighting claimants for years in court over mundane claims.”
AIG is also known for these actions:
- Having uninformed service agents
- Conspiring with insurance brokers
- Not communicating to policyholders effectively
- Some executives being found guilty of fraud
Many customers complain about long wait times and inadequate representatives on the phone who cannot give a straight answer to questions. Many people even get different answers from different representatives.
To test this, the research team at CarInsuranceComparison.com called five AIG representatives, asked the same questions and got five different answers. They were also transferred to the wrong department twice.
3. Farmers Insurance: Rewards Employees for Giving Low Claim Payouts
While there are worse options than Farmers Insurance, the provider is still frequently mentioned on the same lists of bad insurance companies as Allstate and AIG. According to the AAJ report, Farmers Insurance has been known to:
- Actively encourage employees to deny insurance claims
- Train adjusters to prioritize profits over the interests and rights of policyholders
- Offer incentives to employees who reach low payment goals
- Intentionally create a frustrating claims process
Farmers had an employee incentive program “Quest for Gold” that offered pizza parties, $25 gift certificates and pay raises for adjusters who met company goals. These goals included “low [claim] payments and [dissuading] claimants from retaining an attorney.”
How Much Money Do These Companies Make?
It’s generally well known that when a car insurance company keeps denying claims, it tends to make more money. With that in mind, here are the numbers of written premiums in 2021 by our top three worst companies, according to the National Association of Insurance Commissioners (NAIC):
- Allstate: $40.7 billion
- AIG: $14.1 billion
- Farmers: $24.4 billion
Allstate is the fourth-largest insurer in terms of premium income, and Farmers still made the top 10. AIG was the twelfth-largest insurer.
Customer Satisfaction Scores
To get other professional reviews and opinions of how these companies treat customers, our research team took a deeper look at the 2022 J.D. Power U.S. Insurance Shopping StudySM and the 2022 J.D. Power U.S. Auto Insurance StudySM.
While AIG didn’t make the lists in these studies, Allstate and Farmers demonstrated to have relatively average and below-average scores. In the Insurance Shopping study, while Farmers scored the third highest, Allstate scored lower in overall customer satisfaction than many national providers, including State Farm, USAA and Liberty Mutual.
For the Auto Insurance study, Allstate received below-average scores for most regions of the U.S., including the Central, Mid-Atlantic and New England regions. Farmers Insurance scored very below average for many of the regions as well, including the Southeast, Northwest and Northcentral regions.
Customer Reviews
Like many insurance providers, there’s often a fair mix of customer satisfaction and customer complaints, though many reviews on sites like the Better Business Bureau (BBB) and Trustpilot demonstrate more unhappiness with these companies.
Allstate Customer Reviews
Of the reviews, many reflect the AAJ’s report on Allstate’s performance – especially when it comes to the company offering small claims payouts and backing out on helping customers. Here’s one example:
“Fraudulent company. My son was involved in a car incident that resulted in someone claiming to be hurt. This person is now suing my son and me […] I contacted Allstate. […] Allstate‘s legal team determined that I qualified for coverage, and they hired a local attorney to represent me against the lawsuit.
– Christina S., BBB (Aug. 19, 2022)
Almost two years later, Allstate turned around on this decision and is now suing me to get out of representing me, even though they were the ones that made the decision to represent me in the first place. They also want me to pay their attorney fees. This has cost me thousands of dollars to hire an attorney to protect myself against Allstate.”
Farmers Insurance Customer Reviews
On Trustpilot, there are only a little over 50 reviews for Farmers Insurance, but 77% of those reviews categorize the company as “Bad” and “Poor.” Here’s what one of the policyholders had to say:
“The quarterly bill for my auto and my homeowners policy was due on 3/22. I mailed payment on 3/16, but Farmers did not deposit the checks until 3/29. They canceled both policies, notified me and sent me refund checks for both policies on 4/18. On 4/21, I opened policies with another company.
– AHD., Trustpilot (Apr. 28, 2022)
On 4/28, I received a bill for $245 from Farmers. After spending over an hour on the phone with several representatives on three separate calls, being sent back and forth and being on hold for 23 minutes, I was told that the policies were continued and that the bill is for the 3/25-to-4/21 time frame. How could that be since they canceled the policies?”
AIG Customer Reviews
While AIG has an average of nearly 4.0 out of 5.0 stars on Consumer Affairs, the company’s auto insurance does have its share of complaints too. Here’s an example:
“A truck in front of me lost […] a drive shaft. […] It tore numerous things underneath my car […] The trucking company had AIG insurance. My car was towed to the dealership where it sat for over a month because I had to deal with the very worst, rudest, unprofessional, so-called […] claims adjuster woman.
– Shirley, Consumer Affairs (Jan. 14, 2019)
She couldn’t get her stories straight from paperwork to emails and telephone conversations. I had to get the trucking company involved to even get her to call me back after they contacted her supervisor.”
How Costs Fair Against Other Companies
While our team couldn’t pull cost data for AIG, we found that Allstate and Farmers had more expensive auto insurance rates for the same kinds of drivers when compared to five other national providers.
| Auto Insurance Company | National Average of Full Coverage Car Insurance* | Average Rates for 16-Year-Old Drivers | Average Rates for 25-Year-Old Drivers | Average Rates for 55-Year-Old Drivers |
|---|---|---|---|---|
| GEICO | $1,360 | $4,466 | $1,420 | $1,213 |
| State Farm | $1,497 | $4,146 | $1,686 | $1,390 |
| USAA | $1,168 | $4,784 | $1,292 | $1,012 |
| Progressive | $1,773 | $11,174 | $1,933 | $1,501 |
| Nationwide | $1,297 | $4,567 | $1,556 | $1,221 |
| Allstate | $2,312 | $8,350 | $2,382 | $2,002 |
| Farmers | $2,317 | $12,428 | $2,451 | $2,044 |
The average annual cost of full coverage car insurance is $1,816. State Farm, GEICO, USAA, Progressive and Nationwide all fall below this average for their national annual rates – but Farmers and Allstate insurance rates are well above it.
Average Rates for High-Risk Drivers
It’s normal for all insurers to raise prices for drivers who have had DUIs, at-fault car accidents and other traffic violations. For drivers with a DUI, the national average rate for full coverage car insurance is $3,277. While Allstate and Farmers are below this average, their rates still aren’t as good as those from other providers.
| Auto Insurance Company* | Average Rates After Speeding Tickets | Average Rates After a DUI | Average Rates After an At-Fault Accident |
|---|---|---|---|
| GEICO | $1,856 | $3,376 | $2,364 |
| State Farm | $1,794 | $2,180 | $1,882 |
| USAA | $1,413 | $2,236 | $1,647 |
| Progressive | $2,311 | $2,328 | $2,822 |
| Nationwide | $1,656 | $2,867 | $2,063 |
| Allstate | $2,746 | $3,582 | $3,598 |
| Farmers | $3,071 | $3,260 | $2,567 |
Allstate and Farmers perform adequately for DUI prices, but their rates are still higher than the national averages for drivers with a recent at-fault auto accident ($2,689) and for drivers with multiple speeding tickets ($2,313).
Our Ratings of the Worst Car Insurance Companies
When rating providers, we tend to look at four key categories and assign different ratings for each. These ratings average out to create an overall rating of each company:
| Factors We Rate | Allstate | AIG | Farmers |
|---|---|---|---|
| Industry Reputation | 9.4 | 6.0 | 8.5 |
| Coverage | 8.8 | 8.0 | 8.6 |
| Cost | 6.5 | 6.0 | 7.5 |
| Customer Experience | 8.5 | 6.0 | 8.9 |
| Overall Rating | 8.2 | 6.5 | 8.3 |
Since AIG is used less compared to other national providers, its scores are lower. AIG also doesn’t have the same amount of auto coverage options (or the same quality) that Allstate and Farmers present to their policyholders.
Allstate and Farmers still have relatively average customer experience ratings overall, if you factor in more than what’s on Trustpilot and the BBB. Compared to the customer experience ratings of other providers, they are still fairly low.
Both Allstate and Farmers have been around for over 90 years, take in a lot of money and provide coverage to some of the biggest amounts of policyholders in the industry. In terms of running a business and being recognizable, this earns them higher scores than they may seem to deserve for industry reputation.
What Makes an Insurance Company Bad?
Learning the signs of a bad insurance company is smart, as this helps you spot issues and avoid choosing the wrong company. The most common complaints are financial. This can include a general trend of:
- Prioritizing profits to the detriment of policyholders
- Raising premiums or refusing to pay out claims
- Having consistent billing errors
The worst car insurance companies also have constant complaints about their customer service:
- The company is either hard to reach or has excessively long wait times.
- Its phone representatives are typically not friendly, helpful or knowledgeable.
- Different representatives provide conflicting information or just direct callers back to the website.
How to Avoid Bad Insurance Companies
The best way to avoid bad insurance companies is to do a bit of research before signing up. Use a comparison tool to find the best rates, then look for reviews of the insurer. Confirm it has a strong reputation and good customer satisfaction ratings.
Pay close attention to how the insurer handles claims, and consult other sites like Consumer Reports. To make things even easier, just stick to one of our recommendations for auto insurance.
Our Recommendations for Auto Insurance
Now that you know which auto insurance companies to avoid in your quest for coverage, consider buying insurance from one of our top recommendations instead. We suggest GEICO or USAA. Both providers are highly rated and performed well in our expert analysis.
Using a comparison tool is also one of the best ways to find cheap auto insurance. Our quote box makes it simple to compare multiple quotes at once.
GEICO: Best Discounts
In our expert analysis, GEICO earned a high overall rating of 9.1 out of 10. The company is known for having competitive rates and a wide variety of discounts for good students, federal employees, military members and more. GEICO can also offer add-on options for your insurance policy, such as:
- Rental reimbursement
- Mechanical breakdown insurance
- Classic car coverage
- Rideshare coverage
USAA: Best Military Provider
USAA earned an overall rating of 9.6. Known for its affordable premiums and strong customer service, this provider offers great discounts for policyholders that are accident free, have taken a defensive driving course or who bundle their vehicles under one policy. USAA also offers many add-ons, including:
- Rideshare coverage
- Rental reimbursement
- Accident forgiveness
- Gap insurance
FAQ: Worst Car Insurance Companies
What are the top five worst insurance companies?
The most common insurers put on lists for the worst car insurance companies are AIG, Allstate, UnitedHealth, Farmers and Liberty Mutual. According to a report by the American Association of Justice, these companies have histories of fraudulent behavior and intentionally frustrating claims processe
What’s the most reliable car insurance?
GEICO, USAA and State Farm typically receive very high ratings for reliability and customer service. All three have some of the best car insurance rates in the nation and have a wide variety of coverage and discount options that help policyholders save money.
Why is Allstate the worst insurance company?
Many surveys and expert opinions name Allstate as one of the worst insurance companies. The most common reason is that the company tends to prioritize profits over policyholders. Allstate usually does this by lowballing claim payments, constantly denying claims and purposefully ignoring policyholders’ attempts to communicate with the company.
What is the largest auto insurance company in America?
According to the National Association of Insurance Commissioners (NAIC), in 2021, State Farm was the largest auto insurance company in the country, with a market share of 15.93%. It was followed by Berkshire Hathaway (the parent company of GEICO) with a 14.31% market share.
