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Statistics for Upheld Consumer Complaints: Alarming

According to the New York State Insurance Department’s 2009 report on consumer complaints, one out of every eight grievances claimed against a car insurance company settled in favor of the consumer. Out of 7,237 claims evaluated by the department, only 948 resulted in findings penalizing the insurers. Customers generally complain about company behaviors, such as delays in payment of no fault claims or failures to renew policies. In more than one fourth of the cases evaluated, the insurance department concluded that it did not have sufficient data to reach a decision.

The insurance department ranks insurance companies based on a ratio calculated by comparing the dollar value of upheld complaints to the amount that the company’s clients paid in car insurance premiums. The ratios are calculated over a two-year span, taking into account the fact that it sometimes takes time for the department to process a complaint. Grievances initiated during a particular calendar year may not be resolved until the following year. On average, insurance companies are faced with ten cents worth of complaints for every million dollars they pay in car insurance premiums, although ratios vary considerably. Each upheld complaint correlated with approximately $9.7 million worth of premiums. Some companies — such as Adirondack Insurance Exchange and Amica Mutual Group — had no complaints at all, while Long Island Insurance Company, the firm with the highest ratio, had $12.19 in complaints per million dollars in premiums This is nearly 25 times the amount of Countrywide, the company with the second highest ratio, for whom $.45 in complaints were upheld for every million dollars worth of premiums. These ratings are available to consumers to reference when making decisions about choosing insurance carriers. New York is a highly competitive insurance marketplace, so such statistics, which provide some gauge of customer satisfaction, can be useful to prospective clients when shopping for car insurance carriers.

The department also publishes an Annual Consumer Guide to Automobile Insurance, which contains a broader range of data. Consumers should bear in mind that these statistics reflect only complaints made by customers carrying insurance on passenger cars, so commercial car insurance customers do not figure into the equation. In addition, the available numbers tell us about complaints that have been taken as far as the level of the State Insurance Department. Many issues are resolved in arbitration, or directly between companies and clients.

The complaint ratio provided by the state’s insurance department is just one set of numbers that should be considered by consumers when choosing an insurance company. Potential customers should also consider their personal experience with a company, as well as any reports they may have heard from acquaintances.

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