If you feel you have been wronged by an insurance company, you may be able to file a grievance against them. The insurance regulatory agencies of most states have established procedures whereby consumers who believe they have been subjected to unfair claims handling can file a complaint against the offending insurance company.
Insurance companies in the United States are primarily regulated by individual states. There is no federal regulatory agency overseeing insurance companies. Most states regulate the conduct of insurance companies to ensure fairness in the way companies deal with applicants for insurance and policyholders. The name of the insurance regulatory agency is called something like: “Department of Insurance”, “Division of Insurance,” “Insurance Bureau.” One of the functions of a Department of Insurance is to enforce these so-called “unfair trade practices” and “unfair claims practices” laws by investigating complaints by consumers and taking action, when appropriate, to get companies to stop conduct that violates the laws and impose penalties for violations. Other duties of a Department of Insurance include reviewing and approving the policy forms used by insurance companies and approving rates charged for various types of insurance to assure compliance with state laws that regulate insurance rates.
If you file a complaint, the complaint will be investigated by the Department of Insurance to determine if the company acted properly and in a manner consistent with the state’s insurance laws, including the “unfair claims practices” laws. In some cases, the investigation may cause an insurance company to reevaluate its handling and disposition of a claim. If a company is found to be in violation of the law, this process also may result in a fine or other penalty being imposed on the company by the Department of Insurance.
State insurance laws impose many requirements and limitations on the way insurance companies conduct their marketing, underwriting (determining which policyholders or risks to accept or reject for coverage) and rate making activities. These laws may also restrict an insurance company’s ability to cancel or discontinue coverage once a policy has been issued. In general, there are many restrictions and limitations applicable to personal or “consumer” insurance, such as personal auto, homeowners and individual or small group health insurance. There usually are fewer restrictions applicable to business and commercial insurance. The specific requirements and limitations often vary considerably from state to state.
Another primary function of each state’s Department of Insurance is to assure that insurance companies operating in the state have the financial ability to meet its obligations to pay claims. Insurance companies must meet certain financial requirements and are required to demonstrate periodically (at least annually) to a state’s Department of Insurance that they continue to meet or exceed the minimum financial requirements in order to continue to conduct business in the state. The Department of Insurance can take various actions against an insurance company that fails to conduct its business in a financially sound manner, including action to cause the company to cease operation in the state.
Meanwhile, if you are unhappy with your current company, why not get a quote from the competition?