Services for Consumers
Understanding Complaint Ratios
What is a complaint?
Complaints are written grievances and concerns that the Department of Insurance has received from consumers, against insurance companies. “Total” complaints includes both “justified” complaints (companies were found to be out of compliance with applicable North Carolina insurance laws, or otherwise at fault) and “unjustified” complaints (companies were found to be in compliance, and not at fault).
What are complaint ratios, and how are they calculated?
Complaint ratios are calculated for four major lines of personal insurance: automobile, health, homeowners and life. Ratios for commercial or group insurance products are not available.
- For Auto, Homeowners and Health insurance, a company’s complaint ratio indicates the total number of complaints (against that company) received during the previous calendar year by the North Carolina Department of Insurance, per $1 million of premiums written by that company in North Carolina during that same year. For example, an Auto, Homeowners or Health insurance complaint ratio of 1.25 means that the North Carolina Department of Insurance received 1.25 complaints for every $1 million of premiums written by that company during the previous calendar year.
- For Life Insurance, a company’s complaint ratio indicates the total number of complaints (against that company) received by the North Carolina Department of Insurance during the previous calendar year, per 10,000 of the company’s North Carolina life insurance policies that were in-force as of December 31 of that same year. A Life Insurance complaint ratio of 1.25 indicates that the North Carolina Department of Insurance received 1.25 complaints per every 10,000 of that company’s North Carolina policies that were in-force.
What time frame do the complaint ratios cover?
Complaint ratio information is currently available for the three most recent calendar years for which data are available. Comparing a company’s ratio across several years can be helpful in determining whether more or fewer complaints have been received against that company, over time.
CAUTION: These ratios are only one tool when shopping for insurance.
For a company that has written only a small amount of premiums or policies in North Carolina, just one or two complaints can produce a relatively high complaint ratio. Therefore, when shopping for individual Homeowners, Auto, Health or Life Insurance, consumers should not base their final decision on complaint ratios alone. The North Carolina Department of Insurance offers these ratios as one factor for you to consider alongside other important information such as policy premiums and benefits, company financial stability, feedback from friends, family or insurance agents, etc. The North Carolina Department of Insurance offers consumers a number of publications on shopping for insurance, and on specific types of insurance (Automobile, Homeowners, Life, Health and others) These guides can be easily located under the Publications tab on the left hand side of this web page.