State Issues 1st Ranking of Home Insurers
The state Insurance Department on Monday released its first-ever compilation of consumer complaint statistics for homeowners insurance. Listed were the 25 largest sellers of such insurance in California, which together do 85% of the business.
The company with the best record was USAA, against which only .061 complaints were received per 1,000 policies sold.
Second best was 20th Century, third was Oregon Mutual and fourth was State Farm, which is the state’s largest seller of homeowner insurance.
The company with the worst record in the department statistics was Republic Financial Services, which does business under the names of Blue Ridge Insurance, Southern Insurance and Vanguard Insurance. The department said it had received 1.049 complaints for each 1,000 policies that company had sold, a record that is 17 times worse than USAA.
However, a Republic spokesman insisted that the Insurance Department had incorrect figures. Steve Johnson, an assistant vice president, said Republic will submit new information today on policies sold that would reduce its complaint ratio.
The statistics are based on the most recent data available and reflect complaints during 1986.
“Some companies perform quite well, while others should strive for improvement,” said Insurance Commissioner Roxani Gillespie in releasing the statistics.
But Gillespie warned that consumers should not base their choice of insurers solely on complaint ratios. Companies writing insurance in higher-risk areas “will probably generate more complaints,” she said, while some smaller sellers restrict their selling to low-risk areas.
Pricing Structure
Gillespie said that other factors to consider when choosing an insurer are a company’s financial condition, pricing structure, marketing methods or other services offered. The department provided no comparative information about those factors in the survey released Monday.
However, in a homeowners comparative pricing survey released by the department in December, the second-ranking company in the complaint survey, 20th Century, was shown to usually have the lowest prices. USAA was not listed in the pricing survey.
20th Century, the state’s sixth-biggest seller of auto insurance, got into homeowners insurance in 1982 and still sells relatively few homeowners policies, 61,109 in 1986.
The big-five sellers in 1986 in homeowners insurance, were State Farm, with 1,386,404 policies; Farmers, 1,215,953; Allstate, 982,186; Safeco, 225,477, and Fireman’s Fund, 201,442.
Compared to State Farm’s fourth ranking in the Insurance Department survey, Farmers was 10th, Allstate 11th, Safeco in a tie for 17th and Fireman’s Fund 19th.
In Sacramento, an official of USAA, whose full formal name is United Services Automobile Assn., said his company was “very pleased, to say the least,” by its No. 1 ranking.
“USAA has a long history of commitment to service,” said Stephen Marlin, assistant vice president for claims. “It’s something that percolates from the top of our organization all the way down. . . . We even refer to our customers as members, rather than policyholders.”
USAA has no offices in Los Angeles. Marlin said it has some representatives here working out of homes. Statewide, in 1986, the company sold 130,795 policies. The Department of Insurance received only eight complaints from policyholders.
By contrast, Republic Financial Services, the company with the worst complaint record, reportedly sold 157,282 policies, and the Department of Insurance received 165 complaints.
An official of Oregon Mutual, the company with the third-best record, said some companies try to head off complaints to state agencies by satisfying the complainers first on their own.
George Kaerth, Oregon Mutual’s branch manager for Southern California, observed: “We make it a high priority to respond to complaints, mostly very minor. . . . Non-response to direct inquiries is what leads to complaints to the Insurance Department.”
Rick Dinon, vice president for corporate relations for 20th Century, ascribed his company’s good record to its “careful and deliberate” personnel training practices. Dave Hurst, a spokesman for State Farm, said his company’s fourth-best ranking “simply reflects the fact that we try to provide the best service that we can.”
COMPARING INSURER COMPLAINTS
The state Department of Insurance has released this study of the number of consumer complaints it has received per 1,000 policies sold for each of the 25 largest sellers of homeowners insurance in California during the calendar year 1986. The 25 companies together do about 85% of the total business.
Total Total Rank Company Policies Complaints 1 USAA 130,795 8 2 20th Century 61,109 5 3 Oregon Mutual 44,197 4 4 State Farm 1,386,404 173 5 Chubb & Son (Fed. Ins. Co., Pacific 55,652 7 Indemnity, Vigilant) 6 Cal. State Auto Assn. 195,147 27 7 Hartford Fire & Casualty 116,529 17 8 Crum & Forster (All West) 78,662 12 9 CalMutual (American Eagle) 63,133 10 10 Farmers 1,215,953 206 11 Allstate 982,186 177 12 Ohio Casualty (W. American, 93,690 19 American Fire & Casualty) 13 California Casualty 98,125 20 14 Prudential 68,166 14 15 Reliance (United Pacific, Planet) 72,998 16 16 Travelers (Phoenix, Charter Oak Fire) 114,909 26 17 Safeco 225,477 54 17 Residence Mutual (Western Mutual) 87,860 21 19 Fireman’s Fund 201,442 49 20 Transamerica 81,515 20 21 Aetna Life & Casualty (Standard Fire, 110,329 34 Aetna Casualty & Surety) 22 Continental Corp. (Fireman’s Ins. of N.J., 91,978 33 Mayflower, Niagara Fire) 23 Royal (Safeguard, Royal Indemnity) 31,733 12 24 Cigna (Ins. Co. of N. Amer., Bankers 43,307 22 Standard, Pacific Employers) 25 Republic Financial (Blue Ridge, Southern, 157,282 165 Vanguard Ins.)
Complaints Per 1,000 Rank Policies 1 .061 2 .082 3 .091 4 .125 5 .126 6 .138 7 .146 8 .153 9 .158 10 .169 11 .180 12 13 .204 14 .205 15 .219 16 .226 17 .239 17 .239 19 .243 20 .245 21 .308 22 .359 23 .378 24 .508 25 1.049
