We often hear stories about insurance companies being evil, or at the very least, subpar and difficult to work with on a claim. The model isn’t ideal, and having to pay thousands of dollars for small payouts and arguments along the way illustrates how messed up the insurance business can be. To get a better idea of just how bad the system can get, we’ve collected some horror stories from people who have experience dealing with these companies. Insurance companies are notorious for taking advantage of people, and below are just a few examples of how insurance companies have screwed over people.
Auto Insurance Horror Stories
Federal law makes auto insurance mandatory for anyone who wants to operate a motor vehicle lawfully in the United States. And while auto insurance is a necessary expense, insurance companies are the last thing people want to deal with. Unfortunately, many of the horror stories about auto insurance companies are not just about problems with policies or billing—they’re about terrible customer service, incompetence, other issues that cause serious problems or the games insurers play after an accident. The result is that many people have no choice but to end up paying more than they need to or having difficulty getting the coverage they need, all while being angry and resentful of the employees meant to serve them.
One case of this is the story of Mary Jo, who had difficulties getting her car fixed.
Mary Jo had to drive a car that needed maintenance, but she couldn’t get it done because of the cost, and her insurance refused to pay for it. She ended up with a car that was still unreliable and was in danger of not running at all. She didn’t even know how bad her car was until it broke down completely, and when she got it inspected, it turned out the vehicle required over $2,500 worth of repairs.
Another horror story about auto insurance comes from a customer who was told that the company had underreported their insurance claims for multiple years. Since it covered everything from payment to maintenance, the damages were severe.
The customer, a self-employed carpenter, had been paying for his repairs and maintenance, which helped him pay all his bills on time but also meant he ran up high car insurance bills because of the frequency with which he had to fix his vehicle. In addition, he ended up losing everything except his family’s home without coverage for repairs or maintenance of his vehicle and with no way to pay off all the insurance debts. These shady insurance tactics are precisely what consumers need to be watchful for when choosing insurers and making claims.
Health Insurance Horror Stories
As we mentioned above, auto insurance is essential but not fun. Health insurance is just as crucial, and similarly, many people have horror stories about dealing with their health insurance.
One such story comes from a woman who found out she had health insurance issues when it was time to pay her premiums after being in an auto accident. Before the accident, she had been paying $160 a month for a policy that covered cancer, heart attack and stroke, hospitalization, ambulance rides, and doctors’ visits – everything except cancer medication since she couldn’t afford that.
She was forced to pay much more than that each month after the accident because of a provision in her previous policy requiring “reasonable and customary” medical needs to be covered, provided they were not already insured under another policy or covered by Medicare or pharmacy coupons. This ended up costing her $1,400 a month, and when she complained, the company only managed to cut her monthly sum by $500.
Once she decided that was no use, she tried to cancel the policy for violation of the renewal laws in North Carolina and bring it back up for review. This didn’t work either – they told her to keep paying, or they would sue her. It took multiple court cases, five years of fighting, and tens of thousands in legal fees before she could get out of paying what they said was owed.
Life Insurance Horror Stories
According to Bankrate, 106 million Americans either did not have insurance or were underinsured. This story is about Jenny, a middle-aged woman whose husband left her when she was diagnosed with late-stage breast cancer. Jenny got the news while preparing their taxes and had to face the fact that she could not afford her medical bills, let alone stress over how she would pay them.
The situation was made worse because her husband left all of his retirement funds in another company’s plan – meaning that all of her life insurance funds would be gone when she died if they did nothing before then.
After trying to deal with it on her own and being told that she was lying by her insurance company, she had to take them to court. She got $60,000 in life insurance in New York, while the rest went toward treating her illness.
Disability Insurance Horror Stories
Disability insurance is another essential part of any policy portfolio, and like everything else in the world, it can sometimes be disastrous if you get stuck with an incompetent company.
One story of an insurance company gone rogue is that of a woman who fell down the stairs and hurt her back and neck. She was told it was a work injury, so she got paid by her disability insurance company, and they sent out their medical expert to assess the situation. What they said shocked her:
They said it wasn’t a work-related injury, so she could return to work. When she didn’t, they sued her for not returning to work since they claimed she wasn’t disabled. When she tried to appeal their decision and show proof that she was disabled, the court ruled against her, arguing that “the commissioner’s findings were supported by substantial evidence,” which equated to “what we say goes.”
In conclusion, those were some of the worst insurance and investment horror stories, but they’re by no means the only ones. Keep these stories in mind when you shop around for you next policy, and always read real user reviews prior to making your decision.
