State Ranks Homeowner, Car Insurers
National Colonial Insurance had the worst consumer complaint record among auto insurers and Farmers Insurance Exchange ranked worst among homeowner insurers in a survey released Thursday by the state Department of Insurance. United Services Automobile Assn. was rated best in both categories.
But the second annual survey of California’s 50 largest auto and homeowners insurers, which consumer groups have praised as a good tool for comparative shopping, was attacked as misleading by several companies that ranked poorly.
Insurance Commissioner John Garamendi singled out Farmers Insurance Exchange, a unit of Farmers Insurance Group, for finishing last two years in a row. He cited the company for “denying payment of legitimate claims, fighting consumers over the amount owed and improperly canceling policies.”
Farmers aggressively rejected the criticism--as it had done a year ago--calling the survey “riddled with flaws” and “of little value . . . to consumers.”
Farmers complained that its Farmers Insurance Exchange unit, with only $20.6 million of premiums written in 1991, was listed separately from its much larger ($300.4-million) Fire Insurance Exchange unit, which had one of the 10 best complaint records.
Thursday’s survey followed one released on Wednesday ranking sellers of health and life insurance.
For No. 1-ranked, USAA it was the second straight year that it made both 10-best lists.
Ridgefield, N.J.-based National Colonial had the worst complaint ratio among auto insurers, with 2.48 justified complaints per $1 million of premiums written, compared to an average of only 0.29 for auto insurers.
The department defines a justified complaint as one involving a violation of insurance laws or regulations or one in which a consumer could not get a response from the insurance company.
Frank Bishop, claims manager for National Colonial, acknowledged the poor record. But he said that he joined the company this year in part to address the problem and that he has “drastically changed” and improved the way complaints are handled.
Garamendi hit Republic Financial Services of Dallas for landing three homeowners subsidiaries--Republic, Vanguard and Blue Ridge--on the 10-worst list.
Both Republic and Coast National Insurance Co. of Westminster, which was second-worst on the auto ranking, criticized the survey’s methodology. They said a complaint ratio based on dollar-volume of premiums instead of number of policies written works against companies that write a lot of low-price policies.
Garamendi said he heard similar “whimpering” about the previous day’s life insurance survey. Rather than quibbling about methodology, he said, insurers should focus on satisfying customers.
The survey noted that the 50 largest auto insurers handle 93.5% of the state’s business, while the top 50 homeowners insurers have 91.2% of the market.
California Insurance Complaints
Insurance Commissioner John Garamendi released this survey of auto and homeowners insurers doing business in California in 1991. The “10 best” and “10 worst” charts rank insurers by their “complaint ratio”--the number of justified consumer complaints against each firm per $1 million of premiums written. The “10 largest” charts rank companies by premium volume. The full survey is available free of charge through the Department of Insurance’s toll-free consumer protection hotline at 1-800-927-HELP.
Auto Insurers With the Best Records
Justified Complaint Company Complaints Ratio United Services Auto Assn. 15 0.05 Auto Ins. of Hartford (Aetna) 6 0.10 Amco Insurance 3 0.11 CSE Safeguard Insurance 3 0.12 Liberty Mutual Fire Insurance 10 0.12 State Farm Mutual Auto 309 0.13 Ohio Security 6 0.17 Inter-Ins. Exch.-AAA of So.Cal. 163 0.21 USAA Casualty Insurance 27 0.21 Mid-Century (Farmers Group) 108 0.21
Auto Insurers With the Worst Records
Justified Complaint Company Complaints Ratio National Colonial Insurance 232 2.48 Coast National Insurance 70 1.85 Progressive Casualty 42 1.14 Colonial Penn Insurance 52 1.10 Stonewall Insurance 54 1.04 Cal-Farm Insurance 31 0.86 United Pacific Insurance 18 0.69 Nationwide Mutual Insurance 26 0.67 Allegiance Ins. (CIGNA Group) 20 0.63 Viking of Wis. (Crum & Foster) 45 0.62
Records of the Largest Auto Insurers
Justified Complaint Company Complaints Ratio State Farm Mutual Auto 309 0.13 Farmers Insurance Exchange 417 0.34 CSAA-AAA of N. Cal. 343 0.28 Allstate Insurance 374 0.31 Inter-Ins. Exch.-AAA of So.Cal. 163 0.21 20th Century Insurance 181 0.24 Mid-Century (Farmers Group) 108 0.21 USAA 15 0.05 Mercury Casualty 110 0.45 Mercury Insurance 59 0.31
Homeowners Insurers With the Best Records
Justified Complaint Complaints Ratio United Services Auto Assn. 0 0.00 American Economy Insurance 0 0.00 Assurance Co. of America 0 0.00 CIGNA Insurance 0 0.00 Home Indemnity 1 0.06 Federal Ins. (Chubb Group) 3 0.07 USAA Casualty Insurance 1 0.07 Continental Insurance 2 0.10 Fire Ins. Exch. (Farmers Group) 33 0.11 Associated Indemnity 5 0.11
Homeowners Insurers With the Worst Records
Justified Complaint Company Complaints Ratio Farmers Exch. (Farmers Group) 41 1.99 Republic Ins. (Rep. Fin. Svc.) 21 1.78 Farmers Home Mutual 13 1.55 Colonial Penn Insurance 11 1.30 Vanguard Ins. (Rep. Fin. Svc.) 10 1.05 Reliance Insurance 8 0.93 Blue Ridge Ins. (Rep. Fin. Svc.) 20 0.89 Aetna Casualty & Surety 13 0.61 Oregon Mutual Insurance 5 0.58 Western Mutual Insurance 9 0.48
Records of the Largest Homeowners Insurers
Justified Complaint Company Complaints Ratio State Farm Fire & Cas. 64 0.13 Allstate Insurance 109 0.27 Fire Insurance Exchange 33 0.11 CSAA-AAA of N. Cal. 30 0.30 Safeco Insurance of America 19 0.28 USAA 0 0.00 20th Century Insurance 21 0.38 Associated Indemnity 5 0.11 Federal Insurance 3 0.07 State Farm General Insurance 9 0.21
