USAA Again Ranks First in Satisfaction on Auto Insurance
The state Insurance Department on Monday released a study of complaints against 34 of the state’s auto insurers in 1987, and for the third time in four surveys a firm servicing only retired military officers and their dependents was ranked best.
The United Services Automobile Assn., popularly known as USAA, received .085 complaints for each 1,000 cars it insures.
Also ranked highly again in the private passenger car survey was State Farm, the largest seller of auto insurance in California, which had the third best record, with .208 complaints for each 1,000 cars insured.
Worst Ranking
Of the state’s other leading sellers, the California State Auto Assn., which services Northern California, ranked second best, the Automobile Club of Southern California ranked seventh, 20th Century eighth, Farmers tied for ninth and Allstate tied for 13th.
The worst ranking went to the comparatively small Insurance Company of the West, a San Diego-based firm that last year insured 34,657 automobiles. It had 2.713 complaints for each 1,000 cars insured.
Most of the complaints have to do with denials of coverage, delayed and allegedly unsatisfactory settlements of accidents, refusals to renew policies, cancellations and premium refunds, according to Insurance Commissioner Roxani Gillespie.
She warned that consumers should not base their car insurance decisions solely on the department’s survey.
“While this study contains ratios indicative of a company’s performance, the department cautions against selecting an automobile insurance company based only on these factors. . . .
“Additional considerations are the company’s financial condition, its pricing structure, marketing methods and other services offered,” she said.
As an explanation of why some companies draw more complaints than others, Gillespie noted that some of the surveyed insurers sell to a select clientele with a low risk of accidents, while others may concentrate sales in high-accident areas like Los Angeles.
“Companies actively writing insurance for problem drivers have a larger number of claims which, in turn, generate more complaints filed with the department,” she said.
This factor contributed to the higher ratio of complaints against the Insurance Company of the West, according to its vice president, Walter F. Prayer. He said the company largely services high-risk drivers who pay monthly through a finance company.
Prayer said bad feelings and complaints arise when his company’s customers default on their payments and their insurance is cancelled in midyear by the finance company.
Department Criticized
Most of the complaints, he asserted, are unjustified, and he criticized the Insurance Department for simply listing the number and ratio of complaints, without indicating how many of them are justified.
When the Insurance Department issued its first complaint ratio study in early 1986, it only listed the complaints it ruled as justified.
But the department official responsible for compiling the latest study, David Stolls, said Monday that he felt the previous evaluation had been subjective and that the department now feels the total number of complaints “is a legitimate measure.”
Stolls noted that as the department’s consumer hot lines have become better publicized, the number of complaints has increased.
Nonetheless, USAA’s complaint ratio actually declined from 1986 to 1987. With the Texas-based company insuring 527,958 California automobiles last year, there were only 45 complaints. The company’s complaint ratio declined by .009 per 1,000 cars insured.
USAA’s financial actuary, Steven Goldberg, said Monday that the company has no agents and does all of its customer contact work from a centralized office.
“Service is our culture,” he said. “That’s the way we’ve operated since we were founded in 1922. It’s almost like we’re on our customer’s side. It’s a very healthy relationship.”
COMPLAINTS AGAINST AUTO INSURERS
The state Department of Insurance has made public this listing of complaints against auto insurers for 1987. 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.
COMPLAINTS RANK COMPANY AUTOS INSURED COMPLAINTS PER 1,000 1. USAA 527,958 45 .085 2. Cal State Auto Assn. 1,783,808 287 .161 3. State Farm 2,783,341 579 .208 4. California Casualty 387,470 86 .222 5. Cal Farm 147,700 35 .237 6. Aetna Casualty 185,746 48 .258 7. Auto Club of So. California 1,266,462 357 .282 8. 20th Century 680,667 208 .306 9. Ohio Casualty 208,711 69 .331 9. Farmers (including Mid-Century) 2,471,402 818 .331 11. Century National 231,929 90 .388 12. Fireman’s Fund 313,345 128 .408 13. Hartford 302,681 127 .420 13. Allstate 1,372,802 577 .420 15. United Pacific 50,822 23 .453 16. Sentry 126,424 67 .530 17. Safeco 259,682 142 .547 18. Geico 293,967 161 .548 19. Progressive 321,616 185 .575 20. Colonial Penn 193,942 112 .577 21. Liberty Mutual 120,834 74 .612 22. Mercury 587,691 388 .660 23. Continental (N.Y.) 127,549 85 .666 24. Prudential Property 61,803 42 .680 25. Kemper 67,588 49 .725 26. Transamerica 147,179 111 .754 27. Crum & Forster (All West) 72,215 57 .789 28. J.C. Penney 71,231 63 .884 29. Financial Indemnity 80,620 75 .930 30. Travelers 88,277 83 .940 31. Nationwide (including Colonial) 243,913 297 1.218 32. Motors Insurance Corp. 52,806 84 1.590 33. Balboa 82,069 168 2.047 34. Insurance Company of the West 34,647 94 2.713
