Colorado Insurance Recovery Numbers Up from Last Year

A Tuesday announcement from Colorado regulators showed that they recouped more than $12.5 million to consumers in the state for the 2011-12 fiscal year, up from the $11.7 million recovered the previous year.

The state Division of Insurance also released its annual report on complaints regulators received about insurers, which showed that although “auto insurance complaints have been decreasing slightly from year to year,” they still make up the vast majority of all complaints. Complaints filed against car insurers, though, also have one of the lowest rates of complaint confirmation. Only about a third of investigations into car insurers’ actions result in a finding of wrongdoing on the coverage provider’s part.

In fiscal year 2011-12, complaints about car policies accounted for 1 in 4 complaints.

However, Colorado employs a unique system that separately categorizes complaints and “auto protests,” which are “challenges to a car carrier’s imposition of surcharges, cancellation or non-renewal, or reduction in coverage” on a vehicle policy. This year’s report is the last to include both categories separately.

Combined with protests, which amounted to 25.2 percent of all complaints, total car-insurer grievances accounted for more than half those fielded by Colorado regulators last year.

Vehicle-related complaints also yielded the most recovered funds of any policy type, at about $3.4 million. The average amount recovered per confirmed complaint was $7,654 for complaints and $240 for protests.

While denial of claims and delays in claim payments are the top reasons for complaints when considering all types of policies, most car coverage complaints had to do with underwriting and how vehicle insurers calculate premiums.

Auto complaints averaged 46 days until closure, tied with homeowners-related complaints as the shortest period among all types of coverage.

“Assisting consumers and helping to resolve issues they have with their insurance company are some of our most important responsibilities,” commissioner of insurance Jim Riesberg said in a statement.

Farmers received the most total complaints of the top 20 Colorado auto insurance companies, with 192 complaints, according to the report. It was also the company that had the most confirmed complaints, with 72.

But when considering the complaint index, which compares individual insurers’ complaint records with the average for all insurers, Allstate Property and Casualty Insurance Company had the poorest record. The average insurer had about one complaint for every $1.35 million worth of premiums it wrote. Allstate P/C policyholders filed complaints at a rate that was nearly twice that.

State Farm, which holds an 18.46 percent share of the Colorado auto insurance market, had the best track record with consumers out of the state’s 20 largest auto insurers. State Farm policyholders filed complaints at a rate that was only about a third of the average.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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