Delays, Denials Top Consumer Insurer Complaints

Insurance company delays, denials of claims and unsatisfactory settlement offers were the top three reasons consumers filed formal complaints against their carriers last year, according to data gathered by regulators.

The National Association of Insurance Commissioners, Kansas City, Mo., said policy cancellations and premium/insurance rating issues completed the top five, reasons for complaints.

Data was collected by the NAIC through its centralized electronic Complaint Database System (CDS), through which states voluntarily report "closed" complaints.

A closed complaint is a complaint that has been investigated and resolved to the satisfaction of the state or jurisdiction in which it is filed. First established in 1990, the CDS was significantly expanded in 1998 and now houses data on more than 2 million complaints.

A total of 222,814 consumer complaints were reported to the CDS in the 2007 calendar year. Aggregate data compiled from the CDS can be accessed on the NAIC's Web site through the Consumer Information Source.

The following is a list of the 2007 top 5 complaints by total number and percentage of overall complaints each represents. The list includes: delays, 42,524 (16 percent); denial of claim, 39,152 (14.7 percent); unsatisfactory settlement/offer, 26,127 (9.8 percent); cancellation, 12,240 (4.6 percent); premium and rating, 11,916 (4.4 percent).

By type of coverage, 2007 complaints were as follows: accident and health, 71,407 (36.4 percent); auto, 67,327 (34.4 percent); homeowners, 24,530 (12.5 percent); life and annuity, 17,727 (9 percent); commercial multiperil, 3,675 (1.8 percent).