How To Check Your Insurance Company's Complaint Record

Everyone has horror stories about insurance companies, whether its auto insurance, health insurance, homeowners, or property insurance. There's a good article at Kiplinger.com that has documented the leading ways insurance companies "mug" or abuse their customers:

"... the top complaint had to do with claims payments -- claims-handling delays (19.1%), followed by denial of claims (17.9%) and unsatisfactory settlement offers (15.0%). You should be concerned if a company you're considering has a lot of complaints in these areas. The next category of complaints revolves around underwriting -- the insurer's process of accepting or rejecting applicants and setting rates. Premium and rating accounted for 4.8% of the complaints, and policy cancellation for 4.2%. The type of insurance policyholders had the most complaints about was accident and health insurance (37.7%), followed closely by auto insurance (33.7%). There were fewer complaints about homeowners insurance (12.71%) and life insurance and annuities (10.4%)."

Maybe you are looking for a new insurance company, or just curious about your current provider. To check an insurance company's complaint record, visit the Consumer Information Source Web site produced by the National Association of Insurance Commissioners (NAIC). Then:

"Type in the name of the company, the state where you live and the type of insurance. (Under "statement type" and "business type," click on "property/casualty" for home and auto insurance or "life, accident and health.") The site then provides the insurer's national complaint statistics. Focus on the complaint ratio, which shows the ratio of the company's U.S. market share of complaints to the company's U.S. market share of premiums for a specific policy type... If the national median complaint ratio is 1.00 and the ratio for the company you're considering is 2.00, for example, that should be a red flag. Also look at the complaint trend report to see whether the company's complaints have been increasing or decreasing over time. If the insurer's complaint ratio is high, check its record at your state insurance department and find out whether any enforcement actions have been taken against the insurer."

To find your state government's insurance department, browse this NAIC Web page with a map of insurance commissioners by state. Both links are great resources, whether you are happy with your current insurance company or looking for a new one.

Comments

[Life Insurance Administration]

Thanks for the info. True feedback is a must when researching any service or product.

[Donna R]

I moved after more than 2 decades in one state and stayed with the same auto insurance company. I found out they use a particularly disreputable company for a soft hit on my credit report and considered my providing my SSN as verbal approval. They now want me to sign off on soft hit credit checks and they do not list the third party who performs these checks. The insurance representative said most insurance companies in the state "pretty much use that" disreputable company for checks. My question: how can I find out who in Texas provides auto insurance and who they use for these soft hits. My concern is data loss, lack of security and just the creepy financial pelvic exam everybody seems to be allowed to give you these days.

[George]

Donna:

Thanks for sharing your experience. Since you live in Texas, I suggest you start your search at one of the following to see who can provide the best help:

http://www.sos.state.tx.us/
Texas Secretary of State

http://www.tdi.state.tx.us/
Texas Department of Insurance

http://www.oag.state.tx.us/consumer/index.shtml
Texas Consumer Protection Office

Good luck and lest us know what happens.

George
Editor
http://ivebeenmugged.typepad.com

[Donna R]

Insurance company sent me their privacy policy. I still have not signed the release. They have not asked for it again. Since I paid in full for the term of the policy, I have six months to shop. Looks like Liberty Mutual uses one of the three credit reporting agencies and not the questionable private company. Thank you for the links, George. Happy New Year. -- Donna R

[Geoff]

That was useful information

Cheers Geoff

[Chesca]

Thanks for the tip! I always like to check reviews before I buy anything.

[Texas Insurance]

Gotta be careful thses days. Thanks for the post!

[Justin Beeble]

Very good idea to check the complaint stats on a potential life insurance company. It's a good idea to have it, but you have to do your research first. Thanks for the tip!