News Currents

Washington’s online complaint guide deemed helpful, but incomplete

Washington Insurance Commissioner Mike Kreidler has launched a new Web-based tool for insurance consumers, called the annual Complaint Comparison Guide. The Washington guide is designed to allow consumers to search online for their auto, health and homeowners insurance company, and compare the company’s volume of complaints to other similar companies.

Located at https://fortress.wa.gov/ oic/complaints/, the annual complaint comparison guide sorts up to 101 companies by complaint index in ascending order for the years 2005 back to 2003. The index shows companies’ market share and how much premium it collected. A company with a complaint index of 1 has an average number of complaints, a complaint index higher than 1 is above average.

According to Stephanie Marquis, spokeswoman for the Washington Insurance Commissioner’s Office, the idea was spawned from an earlier report run by the department. “We had something in the past. We use to run a report from our mainframe computer system, but it was very static. It produced a list that wasn’t very interactive with the consumer. We looked at what some of the other states were doing as well, and wanted to find a way to produce information and allow consumers to search it by market share or complaint index.”

Marquis said a committee in the agency has been working on this issue for the past couple of months, fine tuning the guide. “It involved people from our consumer division, our IS — [information systems], which is our computer folks — and a couple people from our company supervision division who dispelled information on premium and market share. Those three areas of our agency collaborated to create this.”

“Consumers deserve to know how their company stacks up,” Kreidler said. “Our Insurance Consumer Hotline receives more than 2,000 calls a week from consumers with questions about their insurance. While not all calls result in formal complaints, knowing how your company rates before your buy or renew coverage can give you peace of mind.”

However, critics of the guide said the complaint index will not give prospective consumers complete peace. Kenton Brine, northwest regional manager for the Property Casualty Insurance Association of America (PCI), said, “I wouldn’t characterize [the complaint index] as misleading by any means, I just think it is an incomplete view to a consumer shopping for insurance.”

Marquis defined criteria used by the department to designate a formal complaint as, “any formal investigation that we open up. For example, if we open an official file and send a request to the company for more information.”

Some calls are just inquiries, she said, and would not be tracked. “The consumer complaints indexed include all complaints, regardless of how they are resolved — either for the company or the consumer.”

That is the problem, according to Brine. “There are complaints, and then there are valid complaints. If the department opened up a file and found there was no validity, why should there still be a complaint [listed in the index]?” he asked.

Brine conceded that the listing of complaints “is public information that is rightfully collected and distributed by the insurance commissioner as a guide for insurance consumers.” However, he said he didn’t know if it is a reliable place for consumers to look at when trying to decide on an insurer. “I don’t think I could recommend it to consumers as a good context in which to view companies. I certainly would be wary of consumers using this as a solid guide as to whether insurance companies are worthy of their business or not.”

Stewart Sawyer, vice president and actuary of Acordia, said, “If I were using it, I would want to also see something relative to the financial strength of the company. But, that is me sitting here as an actuary and as someone who thinks that is pretty critical, maybe even more critical to the consumer than what the complaint ratio is. Certainly the complaint ratio helps though.”

“Shopping around for insurance pays,” Kreidler said. “The new guide gives consumers one more tool to compare insurance companies. Anyone looking for insurance should do their research. Consider how much coverage you need, how much that coverage will cost, as well as the company’s customer service and financial strength before you buy a policy.”

Brine recalled a few years ago when CLUE was a big issue in several states, including Washington. “Several legislators were concerned that an insurance company might look at a CLUE report and not differentiate between a claim and an inquiry,” he said. “What was decided, as a matter of policy was that insurers had to submit data for use in CLUE reports that only reflected actual claims, not just inquiries from people. It is sort of the same deal here.”

Brine explained what he thinks is perhaps a flaw with regard to the department’s new index. If “somebody phones in a complaint and the insurance department opens a file. Then, the insurance company [could] respond in a way that is satisfactory to the commissioner, but you still have a complaint on file and it makes it look like a worse problem than it is,” he said. “If [the guide] is going to be a statistically valid tool for consumers to use, it ought to be an accurate tool, and it does not appear to be accurate if the [department] is not removing complaints not validated after investigation.”

Consumers who have questions about their insurance coverage or who wish to file a complaint against their insurance company are recommended to call the Insurance Consumer Hotline at 800-562-6900.