Home » Blog » AIG May Just Be the Worst Insurance Company Ever
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Posted On 10.17.14 by in Blog
In 2009, the American Association for Justice released it’s list of the 10 worst insurance companies in America. At that time, Allstate took the top spot for abusive practices and repeat offenses against policy holders. However, if the AAJ were to make their list anew today (and we hope they do soon!) it would be a battle for first place as AIG has broken new ground in reprehensible behavior. You’ll have to judge, but we can’t help but wonder if AIG might be the worst insurance company ever.
It’s hard to know what the most concerning behavior for AIG is, but it’s reputation for claims-handling abuses is certainly near the top of the list. The AAJ report linked above details that former claims supervisors claim that AIG would lock checks in a safe until claimants complained about not receiving their money, or that it was standard practice to delay paying attorney’s fees for at least one year, and fighting claimants in court for years over the most mundane of claims.
AIG has denied manufacturer warranties on cars with the excuse of “new tires are a “modification” to the vehicle, which invalidates the warranty. They denied fire damage claims by claiming the damage was done by smoke, which they stated is air pollution and as such is not covered by the policy. AIG was found to have conspired with other insurance brokers to submit fake bids to the insurance commissioners of several states to make it look like there was a competitive bidding process in the commercial market, thus encouraging the commissioners to allow inflated insurance premiums.
When it comes to claims time with AIG, it’s clear that you can expect to get the hard-ball treatment. They’re hoping you’ll give up. They’re hoping you won’t take a stand against them.
Of course, all the claims abuses are old news for AIG. The AAJ report on the worst insurance companies in America came out before the financial crisis changed the financial world forever. AIG’s greed for collecting fees led the company to insure countless sub-prime mortgage investment products, with disastrous results. When the housing bubble finally burst, AIG was left with nearly nothing. The United States government made the decision to “bail out” AIG with 184 billion dollars, with which it purchased 92% of the company. A company that, at that time, was worth approximately 15.4 billion dollars. For this alone, AIG may be the most despised insurance company in America. But it’s not the end of their misbehavior.
AIG was led for 38 years by Maurice Greenberg. According to the AAJ report, AIG reports that Greenberg misappropriated $20 billion while Greenberg is claiming AIG concealed $4 billion in losses. But believe it or not, that’s old news, too. More recently, Greenberg is now suing the government itself for the way it bailed out the company, calling it extortion and theft.
This claim comes across as so greedy and so opportunistic that comedians such as the Daily Show’s Jon Stewart are making endless jokes about how petty they are.
AIG has been implicated in the manipulation of local government bond issues, including, most deplorably, an incident where AIG conspired with other financial services firms to extract fees from a bond issue meant to promote affordable housing for low-income families. AIG and co-conspiritors took home $12 million in fees, keeping all that money in violation of US tax laws and preventing the affordable housing projects from receiving the intended funds.
When Hurricane Andrew landed in Florida, AIG Executive Vice-President, son of Maurice Greenberg, sent a company-wide memo calling it “an opportunity to get price increases,” and said “We must be the first.”
The truth of the matter is that if you ever have a claim with AIG, there’s a good chance that they will deny, delay, or reject your claim. It’s simply the culture of AIG to put money before policyholders every single time. When it happens to you, don’t hesitate to speak to an attorney. If you are facing a personal injury claim, it’s almost certain you will need help. Don’t hesitate to call for a free consultation.
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