State Issues Report on Complaint Ratios Against Car Insurers
The latest effort by the California Department of Insurance to rate automobile insurance firms on the basis of consumer complaints drew somewhat muted comment Thursday--at least from those who compiled the study.
“This is just another guideline for the consumer to use in making a choice for his personal automobile insurance,” said David Stolls, chief of the department’s policy services bureau. “You have to look at many other things too, such as pricing, service and financial stability of the companies.”
‘Pretty Good Indication’
Consumer Action Network director Steven Miller, however, saw the report as “a pretty good indication” of the attitudes of various companies toward the public.
“Companies ought to make a vigorous effort to clean up their acts,” he said.
It was the third annual report issued by the department and listed 25 companies writing what Stolls said was more than 90% of the personal automobile insurance in California for 1986.
Unlike the first report, which dealt with “justified consumer complaints” during 1984, the latest survey and the one for 1985 included all complaints reported by the companies, justified or not.
Topping the new list with the smallest ratio of complaints (.094 for every 1,000 policies) was United Services Automobile Assn., which insures only current and former commissioned military officers and their families. USAA reported only 41 complaints out of 437,623 vehicles insured.
USAA also had the lowest complaint ratio in 1984 and was second the following year to the California State Automobile Assn., which insures only “qualified” members in Northern and Central California and which came in second this time with a ratio of .114 (or 198 complaints out of 1,737,871 vehicles insured).
At the bottom of the new list with the most complaints per 1,000 insured vehicles was Teledyne’s Burbank-based Financial Indemnity Co., which reported 81 complaints out of 74,353 insured vehicles for a ratio of 1.089 per 1,000.
A Department of Insurance spokeswoman pointed out that Financial Indemnity insures many high-risk drivers.
State Insurance Commissioner Roxani Gillespie warned: “It’s important to remember that companies who provide insurance for problem drivers usually generate more complaints than those companies limiting their business to lower risks.”
That opinion was echoed by Howard McConnell, western division president of Kemper Insurance companies, initially ranked at the bottom of the latest list, but which rose to position 23 when it submitted data on two subsidiaries someone had forgotten to include.
McConnell contended that if certain Kemper subsidiaries were rated separately, the ratio would be much lower than it is with the complaint rate of other subsidiaries (which cover high-risk drivers) figured in.
He declined to criticize the annual state report, agreeing that it is “a yardstick . . . something the consumer should consider.”
Lumped in Report
McConnell said he was bothered, however, by the fact that unjustified complaints were lumped in the report with those found to be justified.
He can only hope, McConnell said, that all the companies on the list are about equal in differentiating between the two.
Stolls said: “We cannot address all the variables. The study would just not be consumer oriented.”
He said the report was a compilation of two categories of complaints. One involves complaints about denials of claims, delays in payment and unsatisfactory settlement offers. The other pertains to non-claim complaints, such as those involving policy cancellations and returned past-due premiums.
Both categories were combined to ascertain the overall complaint ratio, Stolls said.
COMPLAINTS AGAINST AUTO INSURERS The state Department of Insurance has made public this listing of complaints against auto insurers. Commercial coverage is not included. These companies are ranked by ratio of complaints to the number of cars insured. Companies highest on the list had the fewest complaints for the number of cars insured.
No. Cars Total Rank Company Insured Complaints 1 USAA 437,623 41 2 California State Auto Assn. 1,737,871 198 3 California Casualty 373,390 54 4 State Farm 2,561,317 415 5 Interinsurance Exchange Auto Club 1,334,520 219 6 20th Century 687,523 175 7 Farmers (including Mid-Century) 2,791,176 754 8 Allstate 1,868,406 516 9 Century-National 138,926 46 10 Ohio Casualty (including American 212,045 80 Fire & Casualty) 11 Sentry Insurance (including 149,283 60 Middlesex, Dairyland Insurance) 12 Hartford Fire & Casualty 210,791 89 13 Safeco Insurance (including 268,683 129 First National Ins. Co. of Amer.) 14 Nationwide Corp. 312,835 159 (Colonial Insurance of California) 15 Aetna Life & Casualty (including 129,161 68 (Standard Fire & Auto of Hartford) 16 GEICO (including Criterion) 282,538 153 17 Continental Corp. (including Niagara 178,090 102 Fire, Mayflower, Kansas City Fire & Marine, Glen Falls Ins., Fireman’s Fund of N.J., Fidelity and Casualty of N.Y., Commercial Ins., Boston Old Colony) 18 Fireman’s Fund (including National 184,395 107 Surety Corp., Assoc. Indemnity & Amer. Ins., Interstate Indemnity and Chicago Insurance) 19 Travelers (including Phoenix 109,458 66 Ins. and Charter Oak Fire Ins.) 20 Liberty Mutual companies 119,104 83 21 Mercury General 506,193 354 22 Progressive 149,152 138 23 Kemper (including Sequoia Ins. 92,372 87 Nat’l Auto & Casualty, Lumberman’s Mutual, Amer. Protection, Amer. Motorists, Amer. Manuf. Mutual) 24 J.C. Penney 111,362 121 25 Teledyne Group 74,353 81
Complaints Per 1,000 Rank Vehicles 1 .094 2 .114 3 .145 4 .162 5 .164 6 .255 7 .270 8 .276 9 .331 10 .377 11 .402 12 .422 13 .480 14 .508 15 .526 16 .542 17 .573 18 .580 19 .603 20 .697 21 .699 22 .925 23 .943 24 1.087 25 1.089
