Policyholders’ Complaints Fall in State in 1993 : Insurance: The biggest drop was in auto coverage. Garamendi says the survey itself and regulation are responsible.
Policyholders’ complaints against insurance companies fell significantly last year, according to the California Department of Insurance’s annual consumer complaint survey released Tuesday.
The biggest drop was with auto insurance providers, where justified complaints dropped from 2,801 in 1992 to 1,564 last year among the state’s 50 largest insurers.
Ohio Indemnity Co. was ranked as having the highest ratio of complaints among automobile insurance providers, while American Bankers Insurance of Florida was ranked as having the highest among homeowners insurers.
San Antonio-based United Services Automobile Assn. ranked the best among auto insurers, while Vigilant Insurance, Pennsylvania General Insurance, Insurance of North America and Assurance Co. of America ranked at the top of homeowner insurers, with no justified complaints reported.
Most complaints involve insurance companies that do not pay claims in a timely manner, arbitrary contract cancellations, disputes on amounts owed, surprise rate increases and misrepresentation of the type of coverage purchased, department spokeswoman Candysse Miller said.
A justified complaint involves a violation of insurance laws or one in which the consumer could not get the insurer to respond to the claim or questions.
Insurance Commissioner John Garamendi said the widely publicized annual report, along with new regulations, have prompted insurers to clean up their act.
“After four years of reporting the good, bad and ugly of California insurance, we are finally hearing fewer consumer horror stories,” Garamendi said in a statement.
But some insurers suggest that the decline in complaints has more to do with the fact that the department will have to start providing companies with details of its complaints next year in accordance with a bill recently signed by Gov. Pete Wilson.
“The number of complaints this year is getting closer to reality,” said John Millen, director of media relations for Farmers Insurance Group, parent of Farmers Insurance Exchange and Fire Insurance Exchange.
“There’s no reason why our company should have been labeled the way it was for the last couple of years,” Millen said. Farmers Insurance Exchange had been ranked the worst homeowners insurer for three years in a row but climbed 17 slots in the latest survey. “If we agreed with (Garamendi’s) premise that it is his pressure that makes our companies work better for their customers, we would have done that years ago. I think the change is coming from the other side.”
Many insurance companies also disagree with the way the Insurance Department determines if a complaint is justified.
“I really have a tough time accepting their definition of a justifiable complaint,” said Steve Toth, vice president of Ohio Indemnity Co., which was ranked the worst auto insurer in the latest survey. “We respond to every single question (from customers). The department does not even notify us about these so-called complaints.”
That criticism was echoed by Bruce Camacho, vice president of investor relations at American Bankers Insurance of Florida, which was ranked the worst homeowners insurer. He said the company had no statistics demonstrating specific problems in California and had recently been audited by the California Insurance Department with no negative comments.
California Insurance Complaints
The Insurance Department’s annual consumer complaint survey ranked auto and homeowners insurance companies based on the number of complaints that were ruled justified in 1993. Companies were ranked according to the ratio of justified companies per 100,000 policies. For instance, a complaint ratio of 169.9 means that for every 100,000 policies, there were 169.9 justified complaints in 1993.
10 Worst Automobile Insurers
Justified Complaint Company complaints ratio Ohio Indemnity Co. 76 169.9 Western United Insurance 56 78.5 Coast National Insurance 32 75.7 Insurance Co. of the West 20 61.6 Sterling Casualty Insurance 28 50.5 Stonewall Insurance 34 45.1 Colonial Penn Insurance 21 43.3 Civil Service Employees 14 43.0 Claredon National Insurance 32 33.2 National Automobile & Casualty 10 32.2
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10 Best Automobile Insurers
Justified Complaint Company complaints ratio USAA Casualty Insurance 1 0.6 Wawanesa Mutual Insurance 2 1.8 American Economy Insurance 1 1.9 Fireman’s Fund of Texas 1 2.5 California Casualty & Fire 1 2.8 Allstate Indemnity 11 2.8 California Casualty Indemnity 1 2.8 United Services Auto. Assn. 11 3.0 Amica Mutual Insurance 1 3.2 Liberty Mutual Fire Insurance 4 3.7
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10 Largest Automobile Insurers
Justified Complaint Company complaints ratio State Farm Mutual Automobile 187 6.2 California State Auto Assn. 139 7.9 Farmers Insurance Exchange 178 12.6 Allstate Insurance 195 15.7 20th Century Insurance 78 7.7 Inter-Insurance Exchg.-Auto Club 65 7.4 Mid-Century Insurance 71 12.9 United Services Auto. Assn. 11 3.0 Mercury Insurance 27 8.1 Allstate Indemnity 11 2.8
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10 Worst Homeowners Insurers
Justified Complaint Company complaints ratio American Bankers Ins. of Florida 8 65.9 Farmers Home Mutual 13 58.4 Civil Service Employees 27 37.5 Western Home Insurance 12 31.3 Federal Insurance 5 24.2 TIG Insurance Co. 22 22.1 Blue Ridge Insurance 10 20.6 Reliance Insurance 4 20.5 Unigard Security Insurance 5 20.0 Residence Mutual Insurance 9 20.0
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10 Best Homeowners Insurers
Justified Complaint Company complaints ratio Vigilant Insurance 0 0.0 Pennsylvania General Insurance 0 0.0 Insurance of North America 0 0.0 Assurance Co. of America 0 0.0 United Services Auto. Assn. 2 1.2 Liberty Mutual Fire Insurance 1 2.1 California Casualty Insurance 1 2.3 State Farm General Insurance 4 2.6 USAA Casualty Insurance 2 3.7 Amco Insurance (Allied Mutual) 2 4.1
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10 Largest Homeowners Insurers
Justified Complaint Company complaints ratio State Farm Fire & Casualty Ins. Co. 75 4.75 Allstate Insurance Co. 138 14.2 Fire Insurance Exchange 50 4.4 California State Auto Assn. 13 5.2 Safeco Insurance of America 17 6.7 20th Century Insurance 10 4.7 United Services Auto. Assn. 2 1.2 State Farm General Insurance 4 2.6 Fireman’s Fund Insurance 11 18.3 TIG Insurance Co. 22 22.1
