Michigan Insurance Regulators Recovered $5 Million in 2011

Regulators in Michigan reported Friday that they recovered $5 million from consumer complaints filed against insurers in 2011.

The Michigan Office of Financial and Insurance Regulation (OFIR) dealt with 3,441 complaints about insurers in 2011, a figure that is 204 less than the previous year. Twenty-one percent of those complaints stemmed from disputes over auto coverage, the second-leading complaint type behind healthcare disputes that amounted to 48 percent of complaints filed last year.

Half of all complaints involved handling of claims, according to regulators, while one-fourth had to do with customer service and 14 percent were related to underwriting.

A further breakdown of complaints filed against companies showed calculated a “complaint ratio” that compared an insurer’s number of complaints to its total premiums written in 2011.

Of major auto insurers, Allstate registered a relatively high complaint ratio of .27, with 23 complaints in 2011. The company wrote about $86.4 million in premiums in Michigan last year.

Farmers had a ratio of .17, Progressive had .12, GEICO had .11 and State Farm had .08.

Other insurers had higher complaint ratios but wrote a significantly smaller amount of business. For example, Patriot General had a ratio of 1.98 stemming from three complaints and $1.5 million in total written premiums last year.

The constant search for low cost car insurance might be the strongest draw for money-minded consumers, but complaint ratios give shoppers a view of how an insurer handles customer satisfaction and service.

Michigan regulators also said that “other factors may be more meaningful when comparing companies,” including benefits provided under the policy, companies’ financial stability and levels of service they provide.

Earlier this year, insurance regulators in other states also provided their 2011 figures.

In Louisiana, consumers got back $5.3 million last year. North Dakota regulators returned about $5.6 million in 2011. Arizona regulators recovered more than $7.5 million.

Last month, regulators in Connecticut and Montana reported their recovery figures for this year, saying that they got back $1.2 million and $2.2 million for consumers in the first quarter of 2012, respectively.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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