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Auto Insurance Consumer Complaint Ratios

Before agreeing to an auto insurance policy, always do some research on the insurance company itself, regardless of its size. With so much invested in protecting your vehicle, you don't want to discover after the fact that you're covered by a car insurance company with reliability issues.

There are several ways to research a provider's customer track record. One of the best ways to do this is to check the insurance company's complaint ratios.

Types of Complaints

There are numerous possible types of complaints. Distinguishing between them can help you decide how much weight to give them when selecting a car insurance company. “Valid complaints" include state-recognized complaints. Other types of complaints are less formal and include social media posts.

Official complaints can be:

  • “Justified," meaning the company was found to be non-compliant with state laws.
    OR
  • “Unjustified," meaning the insurance company was not determined to be responsible for the problem brought up by the consumer.

What Are Car Insurance Complaint Ratios?

A consumer complaint ratio tracks the number of consumer complaints received by the state Department of Insurance about a car insurance company.

The ratio is based on how many complaints the provider receives for every 1,000 accident claims it files.

High consumer complaints ratios are red flags. Given the traumatic nature of car accidents, the last thing you want is to have your situation compounded by poor customer service.

Customer complaints against car insurance companies always revolve around how providers handle claims.

Common complaints include the following.

  • Lower than expected reimbursement.
  • Company/agent indifference.
  • An inordinately slow processing time with claims.
  • Delayed accident investigations.

Complaint ratios are provided for each calendar year. You can typically access them for the past 3 calendar years.

It can be helpful to see an insurance company's complaint ratios for multiple years to see whether their number of complaints are increasing, decreasing, or staying the same.

Where to Find Complaint Ratios

You can find complaint ratios on individual states' Department of Insurance websites.

While checking consumer complaint ratios at your state insurance department's website, it's also wise to look into the insurance company's financial stability rating. This rating is a representation of a company's ability to fully pay your claim.

You don't want to find out after your vehicle has been totaled by a delivery truck that your provider can't cover your accident claim.

These companies provide ratings of financial stability for car insurance companies.

  • Standard and Poor's.
    • Grading ranges from AAA (best) to CC.
    • "R" means the company is currently under regulatory supervision.
    • "NR" means the company is not rated.
  • A.M. Best.
    • Grades range from A++ (best) to D.
    • "E" means regulatory action has been taken to handle the company's solvency (ability to meet financial obligations).
    • "F" means the company is liquidating.
    • "S" means the business is suspended.

As you check the complaint ratios and compare the ratios between different companies, consider other factors that may affect each complaint ratio. For example, high-risk insurers tend to have higher ratios, as they insure consumers who are more likely to get into serious accidents, which are associated with larger complaint numbers.

How to Submit a Complaint

Submitting a complaint is relatively easy—you'll go to your state’s Department of Insurance website. You can typically find the complaint page by either searching “file a complaint" or finding their consumer section.

Once you've found the right page, follow the instructions to file your complaint. Give as much information as possible.

Other Car Insurance Considerations

The consumer complaint ratio is just one factor to consider when shopping for car insurance. Remember to consider the whole picture.

In addition to thinking about the company's financial stability rating, look at:

  • Costs. Is the car insurance policy affordable? IF your budget can't support it, it won't work for you.
  • Coverages. Does the company offer the array of coverages you want/need?
  • Customer service. How does it feel talking to the company representatives/agents? Do you feel like they have your best interests at heart? Do they give you their full attention?
  • Discounts. Always inquire about ways to save money. For example, does the company offer a good driver discount? Do they offer savings to bundle policies? If not, you may want to seek out other auto insurance companies.

As always, look at the whole picture before making any decisions on buying car insurance to ensure you get the right policy for you—and always get a minimum of three quotes before making any final decisions.