April 30, 2013

Department of Insurance returns more than $6 million to consumers in first quarter of 2013

Claim denial, health insurance drive complaints in Missouri

Jefferson City, Mo. - The Missouri Department of Insurance announced today that consumers who filed complaints against their insurance companies received an additional $6.2 million in claim payments in the first quarter of 2013.

"Consumers should not assume that they've run out of options if their claims have been denied by their insurance company or they feel that their settlement is unfair," said John M. Huff, director of the Missouri Department of Insurance. "Our department is here to protect Missourians and provide them help when they've reached an impasse with their insurance company."

Health insurance generated the most complaints in the first quarter of 2013 with 309 formal complaints, followed by auto and homeowners insurance. The top reason for complaints in the first quarter was claim denial, while delay of claim processing and unsatisfactory offer rounded out the top three.

Some notable accomplishments from the first quarter:

  • A Lee's Summit man contacted the department when he was having his disability claim benefits denied. His insurance company said he was no longer disabled enough not to work. The man appealed the decision but the denial was upheld. The department was able to assist in having the company obtain an independent medical evaluation. Upon completion of the evaluation, the company reversed its claim denial and issued a check of more than $15,000.
  • A Kansas City woman filed a complaint with the department when she noticed that she was paying for duplicate coverage on a second Medigap (Medicare supplemental) policy. The insurance company that was duplicating the coverage initially offered to return the woman $3,360 of the insurance premium for the period of coverage. Once the department became involved, the insurance company agreed to refund the entire amount of the premium, $12,300.
  • A Branson business owner filed a complaint with the department after having issues resolving a fire-loss claim on his business. Once the department began working on the complaint, the insurance company launched an additional investigation before settling the claim. The insurance company issued a check for more than $1.4 million.
  • A Farmington woman was experiencing several delays on a fire-loss claim. After filing a complaint with the department, she received a claim payment of $317,318 from her insurance company for repairs.

In the first quarter of 2013, the department handled more than 900 formal complaints against insurance companies, assisted nearly 2,300 in writing and helped out more than 5,000 consumers over the telephone.

The top categories of complaints were:

By reason

By line of insurance

Denial of claim (241)

Health (309)

Delay of claim processing (170)

Auto (216)

Unsatisfactory offer (108)

Homeowners (121)

In addition, the department's Market Conduct Section has returned more than $1 million to consumers as a result of exams and investigations in the first quarter.

In market conduct exams and investigations, the department reviews insurance company files and procedures relating to the treatment of policyholders - from the rates the companies charge to the way claims are handled to other responsibilities under state law. Exams can result in refunds for consumers, fines, changes in business practices or other remedies.

Since the beginning of 2009, Market Conduct enforcement actions have generated more than $15 million in fines and consumer restitution from insurance companies. Amounts recovered for consumer restitution are paid directly to consumers and fines are remitted to the Missouri State School Fund.

Consumer with complaints or questions about their insurance agent or company can call the department's Insurance Consumer Hotline at 800-726-7390 or visit insurance.mo.gov.