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Top 3 Consumer Insurance Complaints: Delays, Denials, Small Settlements

The top three reasons consumers filed formal complaints against their insurance companies in 2005 were delays, denials and unsatisfactory settlement offers, according to data collected...
January 24, 2006

The top three reasons consumers filed formal complaints against their insurance companies in 2005 were delays, denials and unsatisfactory settlement offers, according to data collected by the National Association of Insurance Commissioners (NAIC).  Following the top three, consumers complained most about policy cancellations and premiums/insurance rating issues. 

The complaint pattern has remained relatively consistent during the past four years, according to the NAIC. A total of 199,639 complaints were filed by consumers in 2005, a 22.5 percent decrease from 2004. 

The NAIC maintains a centralized electronic Complaint Database System (CDS), through which states voluntarily report 'closed' complaints. "Data on complaints can be extremely valuable to consumers who are in the midst of researching different insurance options," said Catherine J. Weatherford, NAIC Executive Vice President and CEO. "Consumers can easily search this data right on our Web site or call their state insurance department.  Giving them access to it is one way we are helping consumers get smart about insurance." Aggregate data compiled from the CDS can be accessed by clicking on the Consumer Information Source link on the NAIC home page at www.naic.org

Top 5 Types of Complaints in 2005 

 

 

 

Total #

Percentage

Delays

43,840

21.96%

Denial of Claim 

37,346

18.71%

Unsatisfactory Settlement/Offer

28,414

14.23%

Cancellation

12,865

6.44%

Premium & Rating

12,259

6.14%

Top 5 Complaints by Type of Coverage in 2005

 

 

 

Total #

Percentage

Auto

80,867 

40.51%

Accident and Health

67,992

34.06%

Homeowners

23,446

11.74%

Life and Annuity

17,208

8.62%

Commercial Multi-Peril

3,580

1.79%

 
January 24, 2006
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