I'm looking for a lower premium on my auto insurance. I found a good deal from a company I haven't heard much about. How can I find out whether it does a good job of paying claims?
State insurance departments keep records of complaints against insurers. You can access this information through the National Association of Insurance Commissioners' Consumer Information Source.
Type in the name of the company, the state where you live and the type of insurance. (Under "statement type" and "business type," click on "property/casualty" for home and auto insurance; you can also search for complaints against companies that sell life, accident and health insurance.) The site then provides the insurer's national complaint statistics.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Focus on the complaint ratio, which shows the ratio of the company's U.S. market share of complaints to the company's U.S. market share of premiums for a specific policy type. Compare that figure with the national median: If the national median complaint ratio is 1.00 and the ratio for the company you're considering is 2.00, for example, that should be a big red flag. Also look at the complaint trend report to see whether complaints have been increasing or decreasing over time.
By clicking on the "Closed Complaint Counts By Code" report you can see why the complaints were made (select "insured" from the drop-down menu because you'd be the person insured). According to the NAIC, the most common complaint in 2008 was for claim delays (19% of closed complaints), followed by claim denials (18.5%) and unsatisfactory settlement offers (14.3%). You should be concerned if the company you're considering has a lot of these types of complaints. Only 2.2% of complaints in 2008 concerned billing, which is not as critical.
It's also a good idea to check the insurer's complaint record at your state insurance department to see if any enforcement actions have been taken. You can find links to your state insurance regulator at the new Kiplinger Insurance Center.
The complaint statistics show how important it is to report problems with an insurer to your state insurance department. You go on record as having complained and, after the complaint is investigated, it can then be included in the figures to help warn other people about potential problems with the insurer. Plus, the regulator may be able to put extra pressure on the insurer to resolve your complaint.
-
Ask the Editor: IRAs, 401(k)s and RMDsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on IRAs, 401(k)s and required minimum distributions
-
Got $100 to Gamble? These Penny Stocks Could Be Worth the RideVolatile penny stocks are high-risk plays with potentially high rewards. If you have $100 you can afford to lose, these three names are worth a look.
-
Being an Executor is a Thankless Job: Do It Well AnywayYou can be a "good" executor of an estate, even though carrying out someone's final wishes can be challenging.
-
Seven Things You Should Do Now if You Think Your Identity Was StolenIf you suspect your identity was stolen, there are several steps you can take to protect yourself, but make sure you take action fast.
-
The 8 Financial Documents You Should Always ShredIdentity Theft The financial documents piling up at home put you at risk of fraud. Learn the eight types of financial documents you should always shred to protect yourself.
-
How to Guard Against the New Generation of Fraud and Identity TheftIdentity Theft Fraud and identity theft are getting more sophisticated and harder to spot. Stay ahead of the scammers with our advice.
-
12 Ways to Protect Yourself From Fraud and ScamsIdentity Theft Think you can spot the telltale signs of frauds and scams? Follow these 12 tips to stay safe from evolving threats and prevent others from falling victim.
-
Watch Out for These Travel Scams This SummerIdentity Theft These travel scams are easy to fall for and could wreck your summer. Take a moment to read up on the warning signs and simple ways to protect yourself.
-
How to Guard Against Identity Theft in 2025Scammers are getting better at impersonating legitimate businesses.
-
Social Media Scams Cost Consumers $2.7B, Study ShowsScams related to online shopping, investment schemes and romance top the FTC's social media list this year.
-
Tired of Scam Text Messages? The FCC Cracks DownNew scam text message rules from the FCC require carriers to block texts from bad numbers and protect consumers.
