Insurance advocacy groups in Washington state are pushing back against a new study released by the Office of the Insurance Commissioner highlighting the recent increase in insurance claim complaints.
According to the OIC, its Consumer Advocacy Program received 467 complaints in April 2023 compared to the average of 287 per month. As of May, claim handling issues were documented in over 80% of all complaint reasons.
In a statement, Insurance Commissioner Mike Kreidler wrote, “most of the time, the claims process works as intended when insureds and claimants alike are made whole. But when there are disputes, the industry needs to step up and do more to help resolve them in a timely, accurate manner.”
The OIC’s July 17 workshop meeting to discuss the issue drew significant interest, with more than three hours of public comment.
“Supply chain issues have caused some repair delays, but I’m especially concerned with the increase in consumers with complaints about the claims experience that do not involve supply chain problems,” Kreidler said during the workshop.
Among those testifying was Northwest Insurance Council President Kenton Brine, who argued the OIC’s report doesn’t tell the full story.
“Most of the time the claims process works as intended,” he said. “Claims that result in complaints annually filed and processed is typically less than 1% year after year.”
However, he added “insurers are keenly aware that those numbers mean nothing to an insured claimant whose auto repair is taking longer than they expected or who has not a timely response to their email or call from their claim adjuster.”
Several issues cited by Brine for the rise in complaints was a combination of supply chain and labor shortages that have resulted in longer auto repair times. He also noted the number of vehicle claims has risen, with a 44% increase for one insurance company between 2020-2022. Additionally, auto thefts and catalytic converter thefts have also increased.
National Association of Mutual Insurance Companies Regional Vice President Christian Rataj described the OIC report as “misplaced” in its conclusions. One of the reasons is that the number of claims has risen at a similar rate as the number of complaints.
“This percentage of consumer complaints submitted is relatively static,” he said. “How is this significant as an increase? Mathematically it isn’t a significant increase.”
Society of Collision Repair Specialists Executive Director Aaron Schulenburg said during the workshop “complication of vehicle technology…has added to the complexity and growing disparity between cheap settlements and highly complex repairs. Claims technology has further exacerbated the process as well.”
The OIC’s Legislative Affairs and Policy division is accepting public comments until Aug. 15.
Abby Andrews