Here are the top five categories of complaints we fielded from consumers in 2014 for both property and casualty (P&C) insurance, and life and disability (L&D) insurance.
Property insurance covers losses of physical property, including homes, rental residences, anything you own, vehicles, boats, and essentially anything you own. Casualty insurance pays for negligence and liability. Collectively, property and casualty insurance is referred to as P&C insurance. Not surprisingly, three of the top five complaint types we got for P&C insurance involve auto insurance and claims.
- Auto insurance liability claims. Frequent complaints we heard from consumers involved disputes of liability in auto claims, the degree of their liability in the claim, poor investigations by insurers, disputed accident facts and complaints from at-fault drivers about insurers trying to collect money from them.
- Personal injury protection (PIP) claims. Washington drivers can get PIP insurance to pay for claims that involve injuries to the driver and passengers in their personal vehicles. We received complaints about delayed payments, denied claims, reduced payments, insurers questioning the medical necessity of care, and their requests for medical exams following an accident. PIP insurance is additional coverage to an auto insurance policy and consumers can choose to waive the coverage; however, they often don’t recall waiving the coverage and call us to complain that their insurer won’t pay PIP claims. It’s important to read your policies and know what you are covered for.
- Auto collision claims. Complaints included delayed payments, denied payments, reduced payments, and arguments about what caused the collision. Insurers do not have to pay for damage that wasn’t caused by a covered peril, such as a collision. For example, if the car’s axle snaps and causes the driver to crash, the insurer will pay for the collision damage but they won’t pay for the snapped axle because it’s a maintenance issue. We also heard from consumers who had complaints about the auto shops they selected to do the repairs. We do not regulate repair shops or repair work, so it’s up to consumers to work with the businesses they select.
- Commercial insurance claims. Commercial insurance is purchased by businesses to cover their property and liability related to their business. We heard from consumers about delayed claim payments, denied payments, reduced payments and disagreements about what caused the loss. As with auto collisions, we heard from businesses that had issues with contractors and the way they did repair work, which is not under our regulatory authority. We also heard from businesses about premium audits, which insurance companies are allowed to conduct periodically to evaluate whether the business is paying a premium that’s too high or too low for their policies, and we received complaints when insurers canceled or opted not to renew policies, which they are allowed to do with advance written notice.
- Homeowner insurance, which covers your home, contents, and personal liability. We received complaints from consumers about delayed claim payments, denied claim payments, reduced payments, liability disputes, problems with contractors and their work, policy cancellations and non-renewals. We also received complaints about insurance companies not paying for the cause of the loss. For example, if an old hot water tank bursts due to rust and deterioration, and the water damages your floors, the insurer will generally pay for the damage to the floors but not to replace the old water tank, which is considered a homeowner maintenance expense.
Life insurance pays your beneficiaries after your death. Health insurance helps pay for medicine, visits to the doctor or emergency room, hospital stays and other medical expenses. Disability insurance pays you an income if you become disabled and unable to work. We respond daily to questions about health insurance coverage and policies. Here are the top five complaint types:
- Medical necessity denials. Consumers filed complaints with us after their insurance companies denied surgery or treatment preauthorization because they questioned the medical necessity of the treatment. Health insurance plans define medical necessity in their contracts, which generally state the treatments must be in accordance with generally accepted standards of medical practice, clinically appropriate in terms of type, frequency, extent, site and duration and considered effective for the patient’s illness, injury or disease. Washington state insurance laws do not give our agency the authority to make medical judgments or determine when a treatment is medically necessary. When insurers deny coverage based on medical necessity, we encourage consumers to exhaust their appeal rights and involve their providers in their appeals.
- Preauthorization of certain medications. Health insurers require preauthorization of certain medications before they will pay for the drug, depending on if the drug is medically necessary. Medical insurance plans set medication policy criteria based on accepted standards of practice, peer-reviewed medical literature and the availability of similarly effective and less costly options, including generic drugs. Washington state insurance laws do not give our agency the authority to make medical judgments or determine when a drug is medically necessary. When insurers deny coverage based on medical necessity, we encourage consumers to exhaust their appeal rights and involve their providers in their appeals.
- Policyholder services. Some of the most common complaints we received involved premium notices and billing. The premium is the consumer’s monthly cost for insurance. We heard from many consumers who purchased a plan through the Washington Health Benefits Exchange. Because there was a delay in transmitting premiums from the Exchange to the health insurance companies, consumers’ health insurance was suspended and sometimes cancelled. We assisted consumers in establishing their coverage and getting medications. We also heard from consumers about cancellations. Sometimes policies were cancelled because the policyholder failed to advise the insurer that they had a different bank account, resulting in non-payment of premiums. In some cases we were able to get coverage reinstated. We also helped consumers reinstate their coverage when the entire family’s health plan was cancelled by mistake instead of removing coverage for just one family member.
- Life insurance. Life insurance companies can require consumers to answer questions about their medical history and their lifestyle practices. Sometimes, life insurance policies lapse because the consumer misses payments due to a move or for other reasons. If this happens to you, contact the company immediately and ask that your policy be reinstated. Depending on your situation, the company may reinstate your policy without requesting that you provide current medical information.
- Claim-handling delays. We received complaints from consumers about delays in processing claims. In those cases, we contacted the company to find out the reason for the delay. Sometimes we found delays were caused by human errors--the wrong information was submitted by the medical provider or the provider used the wrong Current Procedural Terminology (CPT) code.
If you have a complaint, contact our consumer advocates by phone or online. Read more about how we helped consumers in 2014.