Auto Insurance
What frustrates people most about their insurer? 68% of complaints deal with filing a claim
What frustrates people most about their insurer? 68% of complaints deal with filing a claim
We looked at complaint data from the National Association of Insurance Commissioners to see what customers are saying about the 10 largest home and auto insurers in the country.
Key findings:
- Consumers complain most frequently about how claims are handled. Across all insurers, 68% of all complaints were related to claims handling.
- The single biggest complaint consumers made was about unsatisfactory settlement offers — there were 890 such instances in 2019. The second-most common issue was claim delays, with 834 complaints.
- The most common issues varied by state: 100% of claims in Vermont were about claims, but 79% of complaints in Maryland were related to policy cost and cancellations.
- Geico customers were most likely to complain about claims (53.6%), while Chubb customers were the least (38.6%).
- Nationwide had the most favorable Complaint Index rating for auto insurance, while Chubb did best for home insurance.
Claims handling was the biggest area of concern among consumers, with issues regarding underwriting a distant second
Overall, the complaint data showed that insurance customers were most likely to encounter problems when filing a claim. We found that 68% of all complaints involved claims issues, such as low settlement offers (how much an insurer pays you when you make a claim), delays during the claim process and outright claim denial.
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. But the promise of getting fair and prompt reimbursement after a loss is the reason you buy insurance in the first place.
The second-most common area of complaint was underwriting, which is how an insurer assesses a customer's risk. It determines how much a customer pays and whether their policy will be renewed after filing a claim.
This category only accounted for 17% of complaints nationwide. But it relates to claims, too, because insurers may cancel a policy if a customer files frequent or expensive claims.
Most common insurance complaints among major insurers
Rank | Complaint | Complaint area | Number of complaints in 2019 |
|---|---|---|---|
| 1 | Unsatisfactory settlement/offer | Claim handling | 890 |
| 2 | Delays | Claim handling | 834 |
| 3 | Denial of claim | Claim handling | 550 |
| 4 | Adjuster handling | Claim handling | 313 |
| 5 | Premium and rating | Underwriting | 166 |
| 6 | Cancellation | Underwriting | 161 |
| 7 | Nonrenewal | Underwriting | 157 |
| 8 | Surcharge | Underwriting | 142 |
| 9 | State specific | Claim handling | 126 |
| 10 (tie) | Comparative negligence | Claim handling | 118 |
| 10 (tie) | Premium refund | Policyholder service | 118 |
Claims problems are especially bad in Vermont and Missouri, but some states have other issues
Some states had bigger claims problems than others. Among the complaints we looked at, every single one filed in Vermont involved claims. And in Missouri, every complaint except one dealt with claims.
Top 5 states with frequent claims-related complaints
Rank | State | % of complaints that were about claims |
|---|---|---|
| 1 | Vermont | 100% |
| 2 | Missouri | 99% |
| 3 | West Virginia | 94% |
| 4 | Montana | 91% |
| 5 | Arizona | 86% |
There were a few states that bucked the national trend, however. For example, 79% of complaints in Maryland were related to underwriting, especially nonrenewal and insurance surcharges. In fact, Maryland had the most complaints of any state except California — a state more than six times its size.
Half of the complaints in Nevada related to policyholder service. In particular, customers were often unhappy with billing practices and how they were notified about their premiums.
Overall, the states with the most complaints tend to be populous and experience a lot of natural disasters, such as California (which experiences wildfires) and Florida (frequently gets hurricanes).
Rank | State | Number of complaints | Top complaint |
|---|---|---|---|
| 1 | California | 772 | Unsatisfactory Settlement/Offer |
| 2 | Maryland | 298 | Surcharge |
| 3 | Florida | 297 | Delays |
| 4 | Texas | 277 | Delays |
| 5 | Georgia | 200 | Adjuster handling |
| 6 | Colorado | 187 | Unsatisfactory settlement/Offer |
| 7 | Oklahoma | 168 | Unsatisfactory settlement/Offer |
| 8 | Louisiana | 144 | Delays |
| 9 | Ohio | 137 | Delays |
| 10 | New Mexico | 125 | State specific |
Complaint totals are based on the number of complaints filed to the top ten P&C insurers nationwide in 2019.
What bothers people most about your insurer?
Customers at all 10 insurers were most likely to gripe about a claims-related issue, but not every insurer had the same distribution. About three-quarters of complaints directed at Geico dealt with claims, typically with claims delays and unsatisfactory settlement offers.
Conversely, Chubb customers were much less likely to complain about a claims issue. Only 43% of complaints made about that insurer involved claims. Instead, customers said they weren't happy with the sales and marketing process. "Misrepresentation" of coverage offerings was the single most common complaint among Chubb customers, and Chubb received more complaints regarding this issue than any other insurer we looked at.
Most common insurance-related complaints among the top ten American insurers
Company | Single most common complaint |
|---|---|
| Allstate | Delays |
| Farmers | Unsatisfactory settlement/offer |
| Chubb | Misrepresentation |
| Geico | Delays |
| Liberty Mutual | Adjuster handling |
| Nationwide | Denial of claim |
| Progressive | Unsatisfactory settlement/offer |
| State Farm | Unsatisfactory settlement/offer |
| Travelers | Unsatisfactory settlement/offer |
Which companies have the least (and most) complaints?
While customers may find a number of reasons to be dissatisfied with their insurer, what matters most to consumers is how often an insurer receives a complaint at all. That's where the NAIC's Complaint Index comes in: It compares the number of complaints an insurer has received with its size.
When controlling for size, Nationwide has the fewest complaints among top insurers for car insurance, and Chubb has the fewest complaints for home insurance.
Nationwide has a Complaint Index for car insurance of 0.43. That means Nationwide car insurance customers are only 43% as likely to file a complaint as they would at another insurer.
And for home insurance, Chubb has a home insurance Complaint Index of just 0.15. Chubb customers only file complaints 15% as often as customers of a typical company.
On the other hand, other insurers didn't fare as well. Liberty Mutual car insurance customers are 96% as likely to file complaints as a typical insurance customer — which still beats the national average.
And for home insurance, Allstate had a national Complaint Index of 1.2 — that's worse than the average insurer nationwide.
Insurer | Auto Complaint Index | Home Complaint Index |
|---|---|---|
| Allstate Corp. | 0.6 | 1.2 |
| Chubb | 0.51 | 0.15 |
| Farmers | 0.86 | 0.34 |
| Geico | 0.81 | --* |
| Liberty Mutual | 0.96 | 0.75 |
| Nationwide | 0.43 | 0.21 |
| Progressive | 0.78 | --* |
| State Farm | 0.69 | --* |
| Travelers | 0.62 | 0.32 |
| USAA | 0.69 | 0.25 |
*The subsidiaries we researched for these companies do not offer homeowners insurance, though other divisions of these companies may offer it.
The NAIC Complaint Index is one of the main ways we evaluate customer service quality from insurers, as it's an objective way to compare service across multiple insurers nationwide. Ratings are weighted toward claims performance, since customers are most likely to file complaints about this.
Younger drivers feel more loyal to their insurance providers, yet are least happy with their current service
Despite feeling dissatisfied with their insurance experience, younger drivers feel the most loyalty to their insurers, according to ValuePenguin’s consumer survey. The findings indicate that young drivers may not always be aware of the financial upside of shopping between insurance companies, a fact that could eventually hurt insurance companies should policyholders realize cheaper rates may be available elsewhere.
While Gen Z drivers were found to be the least happy with their insurance provider of any age group, they are also the most loyal age group to their providers: 79% of Gen Z drivers report feeling loyal to their insurance provider, compared to just 66% of Boomers. Despite their loyalty, Gen Z was also the most savings-driven age group: They were the most likely to spend time looking for a deal if they knew they could save $100.
Query | Gen Z | Millennials | Gen X | Boomers | Silent Generation |
|---|---|---|---|---|---|
| Happiness with their current provider would keep them from comparing auto insurance quotes | 51% | 59% | 67% | 69% | 70% |
| Would spend an hour each year comparing quotes to save $100 | 70% | 70% | 62% | 46% | 52% |
| Feels loyalty to their insurance provider | 79% | 72% | 74% | 66% | 63% |
In fact, all age groups looking for cheaper car insurance could benefit from comparing quotes. Seventy percent of drivers would be willing to switch insurance companies if they can save $25 to $200 per year. The difference between our second cheapest insurer in our analysis (State Farm) and our cheapest insurer (Erie) is over $200 annually, showing how even switching between two comparably affordable insurers can result in big savings.
Methodology
To perform this analysis, ValuePenguin collected complaint data from the National Association of Insurance Commissioners from the 10 largest property and casualty insurers in the country. We based our comparison on each insurance group's largest overall property and casualty subsidiary.
Not all state insurance agencies consistently report data to the NAIC. For our state-level analysis, we excluded any state with fewer than 10 complaints in 2019. Those states were Alaska, District of Columbia, Idaho, Hawaii, North Dakota, Rhode Island, South Dakota, Utah and Virginia.
NAIC complaint reason data is not sorted by type of insurance, so these complaints may apply to homeowners insurance, car insurance or another type, though the majority of complaints logged are for those two.
Companies included:
- Allstate
- Farmers
- Chubb
- Geico
- Liberty Mutual
- Nationwide
- Progressive
- State Farm
- Travelers
- USAA
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.