AIG One of the Worst Insurance Companies in the Country

 

Although the title of this blog may be obvious given what we know this week with bonuses given to employees even thought the company needed a bailout, American Insurance Group is still one of the worst insurance companies in the country, according to the American Association of Justice (AAJ). Forget the rage you felt when you discovered the same people who helped bring the financial maelstrom down on our heads were getting a million dollar bonus; forget the so-angry-you’re-speaking-in-tongues, air robbing comments from both AIG’s “leader” as well as the government that there is little that can be done to keep these bonuses from going ahead. AIG is one of the worst insurance companies due to their systematic abuse of policy holders through bad faith insurance practices. This may or may not have anything to do with their team of financial punks who robbed everyone blind then asked for more.

Some of the findings by the AAJ that made AIG the third most despised insurance company (after Allstate and Unum) for bad faith practices such as:

  • Creating ways to reject automobile warranty claims, even though those claims were approved, to save AIG money.
  • Conspiring with insurance brokers to submit bids, later determined to be fictional, in commercial insurance markets to create the illusion of competition. This forced businesses and local governments to pay higher rates of insurance. AIG wound up paying $12 million to many insurance departments in different states as a result of this. That’s less than a tenth of the amount the company gave out in bonuses last week.
  • Delayed and denied claims through trickery, such as keeping claim checks literally locked away until the claimant complained about the delay, “disposing of correspondence during pizza parties,” and fighting claims in court for years even though the claims were mundane.

As a result, an online survey taken by AIG customers gave the company a 51% very unsatisfied rating. Complaints ranged from how nasty their service representatives are to the company lying throughout the entire process. Turns out, these people were discussing a systemic practice that was consciously perpetuated on thousands of customers at any given time. If the effort was done to save money, it didn’t work.

AIG has lost billions of dollars through disastrous financial schemes to make a few of them rich. Then they came crawling to the government, begging them for money, while threatening that by not getting the money would cause scores of folks who pay insurance premiums to wind up on the dole. Which is worse: conducting your business in bad faith, or using the money meant for those who needed it to give to a financial group that then wound up losing it anyway?