Consumer Complaints Against Insurance Companies On The Rise

The Dallas Morning News has published results of its investigation into consumer complaints against auto insurance companies. According to the DMN article, Insurance Department consumer complaint figures showed that 11 of the 25 largest auto insurers in Texas had higher compaint indexes than they did last year. Consumer complaints included insurance company practices of delaying payment/processing of claims, "low-ball" offers and settlements, denial of claims and liability disputes.

House Insurance Committee Chariman John Smithee, R-Amarillo, told the Dallas Morning News that he has growing concerns about certain insurers who regularly refuse to pay auto accident claims in which their policyholders are at fault. He went on to say, "I get calls about this all the time. There are a few companies that have been a source of continuing problems, as far as paying claims where there is no issue of who's at fault. There is not a whole lot the average person can do." According to Smithee, an insurance adjuster typically tells the injured party that if the claim isn't paid, the person will have to hire a lawyer and will probably wind up with little money. At that point, many individuals feel like they have no choice but to take 50 percent or less of their claim for damages.

According to the Dallas Morning News, of the more than 6,600 complaints lodged against auto insurers in Texas last year, more than half were filed by drivers who were not at fault, but had trouble getting insurers to pay their claims for damages from a car wreck.

Texas Watch, a consumer group active in insurance issues, has concerns that certain unethical companies have an advantage because they undercut regular insurers on premium prices largley because of claims payment practices that include delaying payment and making it diffuclt for claimants to collect. Often times the delay and or difficulty in securing compensation causes claimants to take "low-ball" offers or give up all together. Texas Watch spokesman, Alex Winslow, says the group is concerned that the Texas Insurance Department isn't being agressive enough in policing insurance companies. "They should be exercising more authority over these companies that are using questionable practices," he told the Dallas Morning News.