Insurance
Majority of Insurance Complaints Resolved in Consumers’ Favor
Consumers are increasingly filing insurance complaints as policy and politics mix more.
Claim handling was by far the top reason for insurance complaints in 2024, according to a ValuePenguin analysis of National Association of Insurance Commissioners (NAIC) data.
Here’s what else we found.
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Key findings
- Claim handling is the most common insurance complaint. In 2024, claim handling accounted for 65.2% of closed complaints, with delays (22.2%) and unsatisfactory settlements or offers (12.2%) the top claim-handling complaints.
- By insurance type, consumers are most frustrated by accident and health insurance. This insurance type was responsible for 36.6% of insurance complaints in 2024. Related complaints increased by 17.3% between 2021 and 2024. Accident and health insurance was followed closely by auto insurance at 35.3%, while homeowners insurance rounded out the top three at 18.0%.
- Looking at coverage type, private passenger auto insurance saw the highest rate of complaints. This accounted for 17.9% of complaints. General homeowners insurance (9.9%) and individual accident and health insurance (8.9%) followed.
- Consumers are more likely to have a good resolution. In fact, 26.2% of complaints resulted in the company position being overturned. Meanwhile, consumers received compromised settlements or resolutions in 26.1% of cases. The company position was upheld in just 4.1% of cases.
65.2% of closed insurance complaints involve claim handling
In 2024, claim handling accounted for 65.2% of closed insurance complaints, with delays (22.2%) and unsatisfactory settlements or offers (12.2%) as the top related claims. (Other claim-handling complaints revolve around denials, adjuster handling, prompt pay, state-specific issues and more.)
According to the National Association of Insurance Commissioners (NAIC) Market Regulation Handbook, companies are required to respond to and resolve claims promptly, though no timelines are specifically mentioned.
According to ValuePenguin insurance expert Divya Sangameshwar, claims get delayed for several reasons.
"Claims could include incomplete or inaccurate documentation, or inconsistencies in the paperwork submitted on the part of the claimant," she says. "However, delays also come from the insurance company themselves, who may delay the process citing a need for further investigation. Or the insurer may be swamped with a high volume of claims — which is usually the case in the aftermath of a major natural disaster like a hurricane."
Meanwhile, she says claims often get settled unsatisfactorily when insurers don’t investigate the situation properly, or policy terms and exclusions are misrepresented to the policyholders. Also, there can be confusion over coverage limits and poor communication between insurers and policyholders.
Closed insurance complaints by claim type (2024)
Claim type | # of complaints | % of complaints |
|---|---|---|
| Claim handling | 39,680 | 65.2% |
| Policyholder service | 12,534 | 20.6% |
| Underwriting | 7,043 | 11.6% |
| Marketing and sales | 1,604 | 2.6% |
Source: ValuePenguin analysis of National Association of Insurance Commissioners (NAIC) closed complaints data. Note: Data was pulled on Jan. 7, 2025.
After claim handling, policyholder service saw the next biggest share of complaints, at 20.6%. Consumers’ biggest policyholder issues were state-specific, accounting for 5.4% of complaints. (These were mainly related to home and auto insurance.) Other policyholder service issues include coverage questions, delays or no responses, premium refunds and premium notices or billing.
Accident and health insurance receives highest share of complaints
By insurance type, consumers filed the largest share of complaints related to accident and health insurance. In 2024, accident and health insurance accounted for 36.6% of insurance complaints. By coverage type, the top issues were related to individual and group insurance, preferred provider organizations (PPOs) and health maintenance organizations (HMOs).
Accident and health insurance complaints increased by 17.3% between 2021 (26,266) and 2024 (30,810).
Closed insurance complaints by insurance type (2021-24)
Insurance type | 2021 | 2022 | 2023 | 2024 | % of complaints, 2024 | % change, 2021-24 |
|---|---|---|---|---|---|---|
| Accident and health | 26,266 | 31,915 | 37,519 | 30,810 | 36.6% | 17.3% |
| Auto | 22,588 | 31,101 | 32,324 | 29,734 | 35.3% | 31.6% |
| Homeowners | 13,104 | 12,961 | 15,534 | 15,161 | 18.0% | 15.7% |
| Life and annuity | 5,028 | 5,432 | 5,377 | 5,610 | 6.7% | 11.6% |
| Fire, allied lines and commercial multiperil | 1,156 | 1,073 | 1,291 | 1,227 | 1.5% | 6.1% |
| Miscellaneous | 943 | 1,390 | 1,552 | 1,152 | 1.4% | 22.2% |
| Liability | 686 | 878 | 669 | 473 | 0.6% | -31.0% |
Source: ValuePenguin analysis of NAIC closed complaints data. Note: Data was pulled on Jan. 7, 2025.
Auto insurance followed closely, accounting for 35.3% of insurance complaints in 2024. It received 29,734 complaints last year, up 31.6% from 22,588 in 2021. (The next section highlights what accounted for the bulk of auto insurance complaints.)
Homeowners insurance followed at 18.0%. With 15,161 complaints in 2024, it saw a 15.7% increase from 13,104 in 2021.
Of the insurance types analyzed, just one saw a decrease in the number of complaints it received from 2021 to 2024: liability insurance, at 31.0%.
Private passenger auto insurance accounts for 17.9% of complaints
Looking at coverage type, private passenger auto insurance (or personal auto insurance) received the highest rate of complaints in 2024, accounting for 17.9%.
General homeowners insurance (9.9%) and individual accident and health insurance (8.9%) followed.
Since most insurance complaints stem from claim delays and unsatisfactorily settled claims, Sangameshwar says it’s important policyholders understand what their policies do and don’t cover.
"With home and auto insurance, it’s very important for policyholders to understand their coverage limits and excluded perils to avoid making claims that’ll get denied," she says. "They should also include insurance in their disaster prep, like making an inventory of all the valuable items in their home to find out how much they stand to lose in a disaster situation and making sure they have enough insurance to cover those losses."
For health insurance, she recommends working with a patient advocate who can help policyholders manage their claims process while they focus on their or their family’s recovery. "Advocates can help policyholders understand their insurance policies, ensure that insurers are honoring their commitments, and assist with appealing denied claims and checking medical billing to see that policyholders aren’t overcharged," she says.
Closed insurance complaints by insurance and coverage type (2021-24)
Insurance type | Coverage type | 2021 | 2022 | 2023 | 2024 | % of complaints, 2024 | % change, 2021-24 |
|---|---|---|---|---|---|---|---|
| Auto | Private passenger | 11,058 | 14,921 | 15,971 | 15,104 | 17.9% | 36.6% |
| Homeowners | Homeowners | 6,556 | 6,403 | 7,891 | 8,334 | 9.9% | 27.1% |
| Accident and health | Individual | 6,420 | 8,045 | 9,394 | 7,470 | 8.9% | 16.4% |
| Accident and health | Group | 5,721 | 6,585 | 7,606 | 6,473 | 7.7% | 13.1% |
| Auto | Liability | 5,306 | 6,152 | 6,330 | 5,769 | 6.9% | 8.7% |
| Auto | Collision | 2,181 | 3,499 | 3,814 | 2,942 | 3.5% | 34.9% |
| Accident and health | PPO | 2,081 | 2,567 | 3,449 | 2,803 | 3.3% | 34.7% |
| Accident and health | HMO | 2,909 | 3,344 | 3,991 | 2,715 | 3.2% | -6.7% |
| Life and annuity | Individual life | 2,193 | 2,305 | 2,152 | 2,359 | 2.8% | 7.6% |
| Accident and health | Health only | 1,781 | 1,979 | 2,459 | 2,169 | 2.6% | 21.8% |
| Homeowners | Fire, real property | 1,531 | 1,641 | 2,390 | 1,970 | 2.3% | 28.7% |
| Accident and health | Exchange | 1,028 | 1,572 | 2,081 | 1,781 | 2.1% | 73.2% |
Source: ValuePenguin analysis of NAIC closed complaints data. Notes: Data was pulled on Jan. 7, 2025. This is limited to the top 20 insurance complaints by coverage type.
Looking at the coverage types with the biggest increases in complaints, homeowners hazard insurance ranks first. Complaints have risen a massive 4,866.7% from three in 2021 to 149 in 2024. That’s followed by miscellaneous business interruption (which covers financial losses after a forced business shutdown due to disaster or other reasons), which rose 500.0% from one complaint to six.
Finally, preexisting condition coverage under accident and health insurance saw the third-biggest increase, 300.0%, rising from one complaint in 2021 to four in 2024.
Insurance coverage types with the largest % increases in complaints (2021-24)
Insurance type | Coverage type | 2021 | 2022 | 2023 | 2024 | % change, 2021-24 |
|---|---|---|---|---|---|---|
| Homeowners | Hazard | 3 | 32 | 84 | 149 | 4,866.7% |
| Miscellaneous | Business interruption | 1 | 1 | 4 | 6 | 500.0% |
| Accident and health | Preexisting condition | 1 | 4 | N/A | 4 | 300.0% |
| Miscellaneous | Surplus lines | 4 | 6 | 9 | 15 | 275.0% |
| Homeowners | Single interest | 3 | 2 | 6 | 11 | 266.7% |
| Accident and health | Gold | 105 | 162 | 318 | 322 | 206.7% |
| Miscellaneous | Pet insurance | 27 | 44 | 61 | 77 | 185.2% |
| Accident and health | Self-funded/ERISA | 188 | 676 | 691 | 520 | 176.6% |
| Accident and health | Credit | 4 | 6 | 9 | 11 | 175.0% |
| Auto | Physical damage | 375 | 574 | 796 | 990 | 164.0% |
| Accident and health | Catastrophic | 4 | 8 | 7 | 10 | 150.0% |
| Homeowners | In-home/incidental business | 4 | 4 | 7 | 10 | 150.0% |
Source: ValuePenguin analysis of NAIC closed complaints data. Notes: Data was pulled on Jan. 7, 2025. This is limited to the 15 coverage types with the biggest percentage increases.
Good resolutions likely for consumers
There’s some good news: Consumer wins are more likely than losses. In 2024, 26.2% of closed complaints resulted in the company position being overturned — the most likely resolution. Following that, consumers received compromised settlements or resolutions in 26.1% of cases.
Claims were settled in 18.7% of cases.
Closed insurance complaints by disposition (2021-24)
Disposition | 2021 | 2022 | 2023 | 2024 | % of complaints in 2024 |
|---|---|---|---|---|---|
| Company position overturned | 11,906 | 14,705 | 15,469 | 13,979 | 26.2% |
| Compromised settlement/resolution | 12,604 | 14,575 | 16,572 | 13,929 | 26.1% |
| Claim settled | 8,469 | 10,695 | 11,236 | 10,009 | 18.7% |
| State-specific | 2,400 | 3,509 | 4,455 | 5,364 | 10.0% |
| Referred for disciplinary action | 2,368 | 2,703 | 3,730 | 4,249 | 8.0% |
| Contract provision/legal issue | 1,655 | 1,662 | 2,273 | 2,547 | 4.8% |
| Company position upheld | 1,347 | 1,506 | 2,037 | 2,190 | 4.1% |
| Claim reopened | 191 | 290 | 336 | 377 | 0.7% |
| No action requested/required | 552 | 186 | 191 | 246 | 0.5% |
| No jurisdiction | 197 | 108 | 167 | 217 | 0.4% |
| Referred to proper agency | 95 | 69 | 68 | 84 | 0.2% |
| Complaint withdrawn | 58 | 52 | 52 | 70 | 0.1% |
Source: ValuePenguin analysis of NAIC closed complaints data. Note: Data was pulled on Jan. 7, 2025.
Meanwhile, the company’s position was upheld in just 4.1% of cases. (Other dispositions may play out positively for insurers, such as no action being required or a complaint being referred to the proper agency.)
Sangameshwar says the data shows appeals largely work.
"If your insurance company refuses to settle a claim in a way you think is fair or if they drop your coverage without proper reason, you have a right to appeal the company’s decision," she says. "The benefit of the appeal is that it forces your insurer to tell you why they’ve made their decision — and they also have to let you know you can dispute their decision."
Filing complaint: Top expert tips
"If you’re unhappy with your insurance company or agent, you can file a complaint against them with your state’s Department of Insurance," Sangameshwar says. "Most who file complaints do so because of their unhappiness over claims delays, unsatisfactory settlements or outright denials."
If you plan to start a complaint with your state’s insurance commissioner, here are a few tips to keep in mind:
- A complaint requires documentation. "Make sure you document everything while dealing with your insurer," Sangameshwar says. "You’ll need to fill out a complaint form, submit a detailed account of what happened, and provide supporting documents, emails and a log of phone calls, photographs or screenshots."
- While complaints with your state’s Department of Insurance are meant to be a last resort, you can sometimes bypass the internal appeal process with your insurer. This could include a scenario where the insurance company isn’t complying with a reasonable time frame for an internal appeal (this standard varies by state), or if the insurance company waives its right to an internal review.
- In the case of health insurance claims, a patient facing a life-threatening health crisis can request an expedited internal and external appeal at the same time. Pushing for a faster decision can be critical to accessing coverage for life-saving medicine or helping offset high care costs.
Methodology
ValuePenguin researchers analyzed National Association of Insurance Commissioners (NAIC) closed complaints data from 2021 through 2024. Specifically, we looked at closed complaints by:
- Claim type
- Insurance type
- Coverage type
- Disposition
This data was pulled Jan. 7, 2025.
