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Worst Auto Insurance Companies: Auto Club Insurance Association & Citizens Insurance

Dishonorable Mentions Award

Auto Club Insurance Association is one of the most-complained-about auto insurers in Michigan

Auto Club Insurance Association was one of the top 5 most-complained-about auto insurers among the nearly 80 auto insurance companies doing business in Michigan every year for the past five years (2007-2011), according to data from the Michigan Office of Financial and Insurance Regulation (OFIR).

That means that during those years Auto Club Insurance Association received more consumer complaints than any of the nearly 70 other auto insurers.

Auto Club Insurance Association’s status as a most-complained-about auto insurer may come as no surprise to anyone familiar with Michigan Supreme Court Justice Michael F. Cavanagh’s scathing dissent to the high court’s July 28, 2006, decision in Cameron v. Auto Club Insurance Association.

http://publicdocs.courts.mi.gov:81/OPINIONS/FINAL/SCT/20060728_S127018_100_cameron3oct05-op.pdf

In response to the Republican majority’s decision to relieve ACIA of the obligation to pay for a young auto accident victim’s No Fault benefits, Cavanagh described ACIA as follows:

“This case is essentially the second installment of [Auto Club Insurance Association’s] attempt to further immunize itself and other insurers from having to pay benefits indisputably owed to their injured insured—people who have diligently paid policy premiums with the expectation that, should they be injured, their insurer will reimburse them for all allowable expenses.”

Citizens Insurance Company of America is one of the most-complained-about auto insurers in Michigan

Citizens Insurance Company of America was one of the top 5 most-complained-about auto insurers among the nearly 80 auto insurance companies doing business in Michigan two out of the last five years, according to data from the Michigan Office of Financial and Insurance Regulation (OFIR).

That means that during those years Citizens Insurance Company of America received more consumer complaints than any of the nearly 70 other auto insurers.

Complaints from Michigan consumers have increased against Citizens Insurance Company of the Midwest

Consumer complaints against Citizens Insurance Company of the Midwest increased by more than 100% between 2010 and 2011, according to data gathered by the Michigan Office of Financial and Insurance Regulation (OFIR).

Citizens Insurance Company of America pays a small percentage of premiums on claims

Among Michigan’s largest auto insurers, Citizens Insurance Company of America is near the bottom of the list for paying out the smallest percentage of its premium dollars in claims for its auto-insurance customers, according to loss ratio data gathered by the Michigan Office of Financial and Insurance Regulation (OFIR).

For instance, for every premium dollar Citizens Insurance Company of America receives from Michigan drivers, it only pays out approximately $.56 in auto accident claims submitted by its auto-insurance customers.

Citizens Insurance Company of America’s auto insurance prices are some of the most expensive in Michigan

Among Michigan’s largest auto insurers, the auto insurance rates for Citizens Insurance Company of America were among the Top 5 most expensive in all 16 of the major Michigan markets examined in compiling the “Worst Auto Insurance Companies” list.

Citizens Insurance Company received below average ratings from J.D. Power and Associates

Citizens Insurance Company of the Midwest and Citizens Insurance Company of America, through their parent company, The Hanover, received below average ratings two of the last three years in the J.D. Power and Associates U.S National Auto Insurance Study (2009-2011).

Sources:

  1. Insurance Institute of Michigan, 2010 and 2012 IIM Fact Book, “Top Writers of Auto Insurance in Michigan.” (Page 27)
  2. “2008 Buyers’ Guide to Auto Insurance,” Michigan Office of Financial and Insurance Regulation (OFIR)(Example 3: Pages 16-17).
  3. “The Competitiveness and Premium Excessiveness of the … Auto Insurance Industr[y] in the State of Michigan,” Michigan Office of Financial and Insurance Services (OFIS)[Now known as the Michigan Office of Financial and Insurance Regulation (OFIR)](“Appendix L: Auto Insurance Companies’ Combined Loss Ratios …”)
  4. “Insurance Company Complaint Ratios” (“Coverage Type: Automobile”) for 2007 through 2011, Michigan Office of Financial and Insurance Regulation (OFIR).
  5. J.D. Power & Associates 2012 U.S. Auto Claims Satisfaction Study; J.D. Power & Associates 2011 U.S. Auto Claims Satisfaction Study; J.D. Power & Associates 2010 U.S. Auto Claims Satisfaction Study; and J.D. Power & Associates 2009 U.S. Auto Claims Satisfaction Study.
  6. J.D. Power & Associates 2011 U.S. National Auto Insurance Study; J.D. Power & Associates 2010 U.S. National Auto Insurance Study; J.D. Power & Associates 2009 U.S. National Auto Insurance Study.
  7. Cameron v. Auto Club Insurance Association (Michigan Supreme Court, July 28, 2006, dissenting opinion by Justice Michael F. Cavanagh) http://publicdocs.courts.mi.gov:81/OPINIONS/FINAL/SCT/20060728_S127018_100_cameron3oct05-op.pdf

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