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Consumer complaints against Michigan auto insurance companies increase

Citizens and Allstate saw greatest jump in consumer complaints, according to data from Michigan’s Office of Financial and Insurance Regulation (OFIR)

To anyone who has recently filed a No-Fault claim against an auto insurance company for PIP benefits, odds are it won’t come as a surprise that consumer complaints against auto insurance companies are on the rise.

Remember, the vast majority of complaints are not filed. There are several reasons for this, including that the current insurance commissioner in Michigan was an industry insider and insurance company president, and that Michigan has no bad faith law, punitive damages, or even a consumer protection act that can be used to protect people from insurance company abuse. Most experienced No-Fault and insurance lawyers, myself included, normally explain why it’s pointless. But even so, there are enough people so frustrated with insurance companies in this state that complaints still get filed.

It is interesting to point out that the number of No-Fault (first -party) lawsuits have significantly increased, which is a truer indicator of how most insurance companies are treating their own policyholders in this state.

But, according to recent data released on June 22, 2012, by Michigan’s Office of Financial and Insurance Regulation (OFIR), overall complaints against the state’s auto insurers increased from 660 in 2010 to 690 in 2011, even though overall line of coverage complaints declined.

Here’s more information: OFIR 2011 insurance company complaint statistics.

Here you can find information on total complaints, complaint reason, and lines of coverage.

On an individual company basis, some of Michigan’s largest auto insurers saw increases in consumer complaints:

  • Allstate Insurance Company,
  • Auto Club Group Insurance Company,
  • Citizens Insurance Company of the Midwest,
  • Geico,
  • Progressive Michigan Insurance Company,
  • Titan Insurance Company.

Indeed, the largest jumps in consumer complaints were seen with Citizens Insurance Company and Allstate Insurance Company.

Between 2010 and 2011, consumer complaints against Citizens shot up by more than 100 percent.

And consumer complaints against Allstate nearly doubled, increasing by approximately 77 percent.

Here are the insurance company complaint ratios.

I have written extensively about how bad Allstate Insurance company is, and it looks like the “good hands” people are back to old habits.

But Citizens Insurance Company is really too bad. Years ago, I even had Citizens for my own car (and as a lawyer that has sued every insurance company in Michigan, that’s saying something). They have clearly undergone a major philosophical shift in their claims handling procedures in the last few years. As such, and especially now based upon the explosion of consumer complaints being filed against Citizens Insurance Company, I can no longer recommend Citizens as a good auto insurance company for my clients.

- Steve Gursten is head of Michigan Auto Law. He is president of the Motor Vehicle Trial Lawyers Association and past co-chair of the Michigan Association for Justice Automobile Accident No-Fault Committee. He frequently writes and speaks about Michigan No-Fault law, and is available for comment.

– Photo courtesy of Creative Commons, by Straic

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights. Call to speak with one of our lawyers.

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Blog Author Steven M. Gursten
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