July 6, 2016

How to Check Consumer Complaints on Insurers

How to Check Consumer Complaints about Insurers.   Ranking for Insurance Companies.  Thoughts on Consumer Complaints and Insurers.

From Time to Time, I find it interesting to check in on the performance of the various insurance companies that do business in California.  Being a free agent, I am open to broker insurance with numerous companies.   As opposed to Exclusive Insurance Agents that can only work with one family of insurance companies.  One of the most common questions I get, is which insurance company is the best?  Its a difficult answer to come up with really because of the lack of data points.   There are a few ways to research insurance companies such as through Consumer Reports and your state insurance regulator.   The California Department does occasional surveys of complaints.

California Automobile Insurance Complaint Study:

For years 2014, 2013, and 2012 California has a rather comprehensive compilations of consumer complaints for 50 or so insurers that do business in auto insurance.  As admitted insurance carriers that is.   Some of the names of the insurers may be listed under a legal name.  Therefore it may seem different than what you would expect.  Although I can not explain it, some of the insurers are listed with two slightly different names.  Since this is the case, you will want to be pretty careful drawing any judgements about any one company’s rankings here. You can find a compilation on the California Department of Insurance site here.

California Home Insurance Complaint Study:

The State of California also has a study for the same years for home insurance.  Years are 2014, 2013, and 2012.   The Homeowners Complaint Composite Report also seems to list either the same or extremely similar companies multiple times, so be careful.   As with the Auto Study some of the insurance companies may not be listed under the “marketed” names.

Life Insurance Compilation:

This complaint compilation is specific to life insurance.   The compilation can also be found on the CA DOI’s website.  Its interesting to note that it list companies that specialize in life insurance together in with companies that offer property and casualty insurance as well.   Of all the studies this is the one that I wonder the most about.   In rating all types of life insurance together, there are many types, I wonder how fair it is.    Term Life is completely different than a Variable Life insurance policy.  (Note I am not licensed to sell variable life.)   Whole life is far more complicated than a group life policy perhaps.

Click Here for a Term Life Insurance Quote

Thoughts on Insurance Rankings for Home, Auto, and Life:

I really truly believe that there must be a way to rank insurers for consumer satisfaction.  However the data that I have seen from the likes of Consumer Reports and the California Department of Insurance gives me pause in believing that it is currently possible.  There are a number of issues that I see.

First off, some of the issues stem from the insurance agent rather than the insurance company.  If the insuring agent put you in the wrong product, it hardly seems like the fault of the insurance company.   Second, clients often complain about exclusions to insurance contracts.  However, many of these complaints seems to be misguided.  Pretty much no homeowners insurance company covers the peril of earthquake, however, I have heard people take issue with this.  In the state of California there is a required disclosure to this affect.   Third, jumbling all the categorized insurers into the same general category has many issues.  Not all Home Insurance products are created equal.   And if consumers think they are, well they are incorrect.  The coverage differences between an affluent vs a non standard carrier is significant.  Is it surprising that a non standard insurer that writes unoccupied homes deep in the forest would have more complaints than a preferred carrier that has much more stringent underwriting criteria?

Fourth, it would seem that many complaints that seem legitimate do not seem to bubble up.  The client that is worth $2MM dollars yet is driving around with only $50K/$100K in auto liability coverage is the classic example.   At what point in the years of doing business together  does the online insurance carrier owe it to the client to check in?  Lastly, I believe that the world of insurance, especially, home and business insurance is incredibly complicated.  No matter what “Flo” tells you, it is not necessarily something that you can do yourself.  At least well.  So I have trouble discerning which people have issue with the insurance company for something that the company did wrong or because the client did not really understand.

Mind you that I am not on the front lines of rating these insurance companies but I do see and hear a lot from current and future customers.  Many of the issues that I hear, are quite honestly, not something that the insurer did wrong.   One thing that I say over and over is that Insurance is not a bank account.  You are not due the withdrawal of ten years of premiums for any reason that you wish.  It must be for a covered loss.  There are lots of other issues that I can imagine that would be an issue, most of which I have not listed.

I do not wish to make it sound like I am defending insurance companies.  I have seen terrible mistakes by insurers.  Wrongly printed documents after months of attempting correction.  Crazy underwriting questions.  Slow claims issues and all other sorts of other issues.   Insurance carriers are far from angels and I do wish to see a nationalized method of accurately ranking and categorizing them.

About Marindependent Insurance Services LLC:

Based in mountainous Marin County California, Marindependent is an independent insurance broker.   We sell and service with a client based focus.  Auto, Home, Term Life.  Also Umbrella, Harder to place homes, Flood and Earthquake.   Call or email us today for a quote or price estimate.

Insurance Website Disclaimer:

Reading about insurance online is not a suitable replacement for speaking with a licensed agent or broker in your jurisdiction.   Always speak with one whenever considering purchasing, cancelling, or even changing insurance.  Marindependent Insurance Services LLC is regulated by the California Department of Insurance.   California License 0K10734.   Please read our full disclosure here.  We are licensed in the great state of California only.