Consumer complaints pile up against home and auto insurers

By: - June 13, 2023 5:05 pm

(Getty Images)

If you live in Washington and have had recent frustrations with your home or auto insurer, you’re not alone.

Insurance Commissioner Mike Kreidler’s office has logged a “historic volume of complaints” since 2021 and plans to hold a workshop next month to gather more information on what’s behind the surge. The Office of the Insurance Commissioner’s Consumer Advocacy Program says it received 467 complaints in April, up 63% from a historic average of 287 a month. Much of the rise is with auto claims.

“Most of the time, the claims process works as intended when insureds and claimants alike are made whole,” Kreidler said in a statement. “But when there are disputes, the industry needs to step up and do more to help resolve them in a timely, accurate manner.”

Auto insurance complaints jumped to 3,276 last year from 2,576 in 2019. For homeowners policies, complaints climbed to 1,335 in 2022 from 829 in 2019, according to an Office of the Insurance Commissioner report. Through May 15 this year, auto complaints totaled 1,145 and homeowners 508.

With auto insurance, many of the complaints tend to fall into just a handful of areas, the report says, like delays in processing claims, unsatisfactory settlements or settlement offers, or claim denials.

The American Property Casualty Insurance Association said it would “partner with the OIC as they examine these trends,” but that the numbers need to be put in context, noting Washington has over 4.8 million cars and over 2.4 million homes insured.

“While the percentage increase is high, the actual numbers are still very low, indicating that insurers are handling claims appropriately in the vast majority of cases,” Mark Sektnan, the group’s vice president for state government relations said in a statement. “Among the many issues APCIA will point out is that the complaint ratios in Washington are extremely small.  The complaints received are well less than 1 percent of Washington policyholders.”

One factor the report highlights with auto claim complaints is insurers’ use of mobile-app-based repair estimates that rely on photos instead of having an adjuster look at damage in person. “These estimates can be significantly lower than expected,” the report says.

Sektnan acknowledged the use of virtual inspections by insurers is up since the COVID pandemic but said it can speed the process of getting a claim taken care of for both vehicle owners and repair shops. He also said that increasingly complex vehicles can mean that damage to parts like cameras or sensors isn’t confirmed until a car or truck is in the shop.

“Insurers routinely provide supplemental payments to policyholders when more damage is found after a physical inspection,” Sektnan added.

A Zoom forum focused on the rise in complaints and how the state can help to address the issue is scheduled for July 17.

This story was updated with comment from the American Property Casualty Insurance Association

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Bill Lucia
Bill Lucia

Bill Lucia is the Standard’s editor-in-chief. He’s covered state and local policy and politics for a decade, nationwide for Government Executive’s Route Fifty and in Seattle for Crosscut.