A new industry report by LendingTree and ValuePenguin has determined that most customers have issues involving the way their claims are handled – and some insurance companies are better at processing claims than others.
The report found that home and auto insurance customers complain most frequently about how their claims are handled. Across all insurers, the report noted that 68% of all customer complaints were related to claims handling.
The report broke down claims handling complaints into four types – unsatisfactory settlement/offers, delays, denial of claim, and adjuster handling.
Among claims handling-related customer complaints, the report said that the single biggest type was about unsatisfactory settlement offers. For the year 2019, there were 890 instances of such complaints, LendingTree and ValuePenguin found. The second-most common issue was claim delays, with 834 complaints in 2019. Denial of claim and adjuster handling complaints followed at 550 and 313, respectively.
Per state, the most common issues raised by insurance customers varied. While 100% of complaints in Vermont were about claims, 79% of the complaints lodged in Maryland were related to policy cost and cancellations. California was the state with the most home and auto insurance complaints, recording 772 complaints in 2019 – most of which were related to unsatisfactory settlements or offers.
“It’s no surprise that claim issues got the most attention among consumers. Handling one of these covered events, such as a car accident or theft in the home, is stressful enough,” the report noted. “But the promise of getting fair and prompt reimbursem*nt after a loss is the reason you buy insurance in the first place.”
LendingTree and ValuePenguin’s report also revealed the most common insurance-related complaints among the top 10 leading US insurers. They were:
Among this top 10 group, Nationwide had a complaint index of just 0.43 for car insurance – meaning its customers are only 43% as likely to file a complaint as they would at another insurer. Meanwhile, Chubb led the way for home insurance with a complaint index of just 0.15.
On the flipside, among those that didn’t fare well, Liberty Mutual car insurance customers were reported as 96% as likely to file a complaint as the typical insurance customer – so still beating the national average. For home insurance, Allstate had a complaint index of 1.2 meaning it performed worse than the national average.
As of June 22, 2023, 7,922 complaints were filed about private passenger auto insurance, or 15.2% of total complaints. That's followed by homeowners insurance at 6,118 complaints (or 11.8% of total complaints) and individual accident and health insurance at 4,959 complaints (or 9.5%).
As you hit certain life milestones, some policies, including health insurance and auto insurance, are virtually required, while others like life insurance and disability insurance are strongly encouraged.
Insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursem*nt against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured.
State Farm is the largest home and auto insurance company in North America, capturing 17.79 percent of the home market and 18.31 percent of auto. State Farm has an extensive network of 19,000 agents across most of the country and is highly rated for overall customer satisfaction by J.D. Power.
Executive Life Insurance Company is regarded to be the biggest bankruptcy of an insurance company in the United States in the course of recent years. Based in California, the life company had to file for bankruptcy in 1991 following disastrous investments in junk bonds.
The first focuses on property/casualty insurance such as auto, home, and commercial insurance.The second focuses on life and annuity insurance.The third is public and/or private health insurance.
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