Unum second on list of the worst American insurance companies
February 25th, 2009 by Kurt Niland
The American Association for Justice (AAJ) recently ranked Unum number two in its published list of Ten Worst Insurance Companies in America. The report opens with an overview of the insurance industry’s staggering assets and wealth, which amount to just under $4 trillion – higher than the gross domestic product of every country in the world except for the U.S. and Japan. But despite the riches, despite the $1 trillion in annual premiums, and despite enormous profit margins, many insurance companies continue to employ “Deny, Delay, Defend” strategies in dealing with their policyholders.
“Some companies have discovered that they can make more money by simply paying out less,” the AAJ report states. Unum routinely challenges legitimate disability claims, hoping that frustrated claimants will give up or settle for less than their claim is worth. The insurance company is also accused of devising a cost-cutting scheme in which claimants are directed to file for Social Security disability insurance benefits first, even though the claimants may be completely unqualified for such benefits. Claimants who failed to follow the procedure had their benefits cut by Unum, and the process added unnecessary stress to the already overburdened Social Security system.
Other Unum claimants, such as Debra Potter, who actually sold Unum disability policies for years, had their legitimate claims flatly denied for inappropriate reasons. When Potter was diagnosed with multiple sclerosis and filed a disability claim, Unum denied the claim, saying that her condition was “self reported.” Her doctor wrote several memos to Unum’s claim department telling them that “there is no basis to support that her complaints are anything other than legitimate.” Her employer, BB&T appealed to Unum on Potter’s behalf. Even the Social Security Administration concluded Potter was totally disabled. And social security disability is notoriously more difficult to claim than insurance from private providers. But Unum denied her.
After three years, Potter finally hired an attorney and Unum agreed to pay her disability claim.
Unfortunately, Potter’s experience is not an isolated incident. It’s a matter of practice. “The 10 worst insurance companies that made the list did so because of their shameful treatment of policyholders,” said Gibson Vance, president of the Alabama Association for Justice, in a response to AAJ’s report.