Ill. Homeowners Complaints Up 2nd Year in Row

August 26, 2004

While Illinois consumers filed fewer complaints about their insurance companies and HMOs in 2003, complaints regarding homeowners insurers were up for the second consecutive year, according to statistics released by the Illinois Department of Financial and Professional Regulation (IDFPR).

Over the last three years, total complaints against HMOs dropped by 17 percent, from 1,430 complaints in 2001 to 1,185 in 2003. The decrease in HMO complaints may be attributed to the fact that HMO enrollment has steadily decreased over the last several years. From 2002 to 2003, HMO enrollment declined approximately 7 percent. Over the last five years, HMO enrollment has decreased almost 28 percent.

In addition to HMO complaints, other types of coverages have experienced a decrease in complaints: individual life (-11 percent); individual annuity (-5 percent); individual accident and health (-9 percent); group accident and health (-16 percent); and group credit accident and health (-19 percent).

For the second year, however, homeowners insurance complaints increased significantly.

In 2003, as in 2002, homeowner insurance complaints increased by 16 percent, from 1,462 in 2002 to 1,692 in 2003. The bulk of this increase occurred in complaints against companies’ underwriting practices, which increased from 678 complaints in 2002 to 851 complaints in 2003, a 26 percent increase.

Acting Insurance Director Deirdre Manna pinned the complaint increase on weather-related losses and insurers’ “more selective underwriting criteria.”

Automobile complaints also witnessed a significant increase in 2003. The rise in auto complaints, from 3,885 in 2002 to 4,227 in 2003, represents a 9 percent increase. The majority of this increase was due to an 11 percent increase in the number of auto claim handling complaints. In contrast, the number of auto underwriting complaints actually witnessed a slight decline from 2002 to 2003.

The Division of Insurance, now a part of the new IDFPR super-department, investigated 11,762 written complaints against insurance companies in 2003 compared to 12,019 in 2002 and 12,269 in 2001, an overall decrease of 4 percent over the three years.

For a copy of this report, visit the IDFPR Web site.

Topics Trends Homeowners Illinois

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