What to expect from your Department of Insurance. While the name varies from state to state, all states have a government agency that acts as its "Department of Insurance".
While their primary goal is to monitor the financial stability of companies doing business in their state, the departments also accept complaints from state residents who believe that their insurance company has treated them unfairly.
However, in the vast majority of situations, consumers who file a complaint are not able to achieve the kind of result or satisfaction that they are seeking.
This is true even when their complaint is justified.
There are valid reasons why this occurs, and we will explain some of those reasons below. You need to understand what departments of insurance are intended to do, and what they are not intended to do. When a complaint is filed, the investigator assigned to the matter is required to determine whether any specific state regulations or laws have been violated.
That analysis becomes somewhat "technical" and may involve, for example, the issue of whether or not the insurance company responded to an insured's inquiry within the allowable time frame established by that state's regulations. While some insureds' complaints allege delays in communications and the like, most complaints attempt to address an issue far more important and fundamental to the insured, namely, whether the insurance company has been "fair" with them.
For example, has the insurance company actually paid fair market value for an insured's vehicle which was totaled in a car accident? Has the scope of the insurance company's investigation of the claim gone far beyond what the insured feels should have been necessary to pay the claim? These types of issues, dealing with the overall fairness or good faith conduct by the insurance company, are specifically not the type of issues that a department of insurance is able to consider. It's not that the department doesn't care about your problem. It's simply that the type of problem you have presented to the department is not related to whether or not any specific regulation or statute has been violated. Issues of "fairness" are issues to be decided in courts of law, not issues to be decided by governmental agencies. As a result, the response an individual often receives from their department of insurance is a letter indicating that the matter has been reviewed and that the department has "found no violation" of any regulation or statute.
This type of response is, of course, very disheartening to the insured but you need to understand that the decision is probably not a reflection on the merits of your complaint, only a determination that the nature of your complaint is something which the department is not legally able to address. The bottom line, therefore, is that if you choose to file a complaint with your state department of insurance, do so with the above in mind. Also remember that even if the department of insurance declines to "get involved" with your particular situation, your complaint has value because it constitutes additional statistical evidence as to the behavior of the insurance company in question. Therefore, your complaint does some good as it helps the department identify, through the volume of complaints received, which insurance companies may need to have their claims practices investigated and analyzed by the department more frequently than other companies.
