Insurance claim complaints are common after any catastrophic weather event. A high number of policyholders filing claims and a limited number of adjusters can cause longer turnaround times, rushed inspections, and overall delays in the process. Insurance carriers are required to meet specific deadlines once a claim is filed but what happens when they don’t and more importantly, what can policyholders do?
The derecho storm that occurred in August 2020 is a prime example of how state oversight is needed to stop abuse and ensure insurance companies properly serve policyholders. The storm impacted almost the entire midwest with Nebraska, Iowa, Illinois, Indiana, and Ohio being the hardest hit. According to the NOAA, this rare weather event caused over $7 billion in damages and ranks as the second most costly storm of 2020 and the fourth overall since 1980.
Three months after the storm, KCRG-TV9, a local news station in Iowa ran an investigative story about the number of inbound consumer complaints who were still waiting on damage inspections, received low ball claim offers or who had not heard from their insurance company. At the time the news story was published, the Iowa Insurance Division had only received 90 total complaints out of the 200,597 claims filed.
Consumer complaints about their insurance company are recorded and investigated at the state level. Every state has a “department of insurance” type organization that provides some oversight for insurance carriers. Since insurance carriers are not federally regulated, it is up to these state organizations to ensure consumers are protected. They serve a variety of roles including serving consumers through education and complaint resolution.
How can official complaints be so low if hundreds of people are having problems with their insurance claim?
One person interviewed by KCRG-TV9 said he “didn’t know the office existed or that there was an agency to complain to.” In the original news story, KCRG-TV9 included links and information on how to contact the Iowa Department of Insurance. Since then, complaints have increased by 80%.
Can Consumer Complaints Be Filed With State Agencies?
Investigating complaints is one of the roles state agencies have. Complaints can be about a variety of issues including denials, delays, excessive fees or charges, unfair settlement offers, increased premiums without notification, unfair policy cancellation, and allegations of fraud.
Consumer complaints are factored into market conduct reports that state agencies complete to determine if insurance carriers can continue to offer insurance services in that state. A high number of complaints against a specific carrier could trigger a market conduct evaluation outside of the normal schedule. If a carrier is found to have errored, they could be forced to pay fines and make changes.
It’s important to note that overall investigations take time and don’t always guarantee that insurance carriers will take action to remedy claim issues. In most cases, policyholders will still have to hire a third-party expert like a Public Adjuster or property damage attorney for help.
Claims Oversight Is Needed
State agencies cannot help consumers if they are unaware of the problems that are being faced. It’s unfortunate that so many Iowa policyholders didn’t even know a state agency existed to help. State departments of insurance should be required to take a proactive role in communities impacted by catastrophic events to ensure carriers are not taking advantage of consumers. Education is especially important as many policyholders are unaware of how the insurance claim process works.
Have you been impacted by the 2020 derecho storm or currently dealing with issues related to a property damage insurance claim? Join the conversion by following us on Facebook and reach out to tell us your story.
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