July 26, 2012

Missouri consumers receive additional $5 million in insurance claims payments in first half of 2012

Department of Insurance handles more than 17,000 inquiries this year

Jefferson City, Mo. - The Missouri Department of Insurance has helped consumers receive an additional $5.1 million in claim payments from their insurance companies through the first half of 2012.

"Consumers who have reached an impasse with their insurance companies need to know they have a free resource available to them that can help assist with their insurance claims," said John M. Huff, director of the Department of Insurance. "A call or letter from our technical experts may be all it takes to resolve a dispute between policyholders and their insurance companies."

Health insurance continues to generate the most complaints from consumers, followed by auto and homeowners. The most common reasons for complaints were denial of claims, claim delays and unsatisfactory offers.

Some notable accomplishments from the first half of the year:

  • A Saline County family had extensive fire damage to their home over the holidays. After 10 weeks of delays from the insurance company, the family filed a complaint with the department. Soon after that, the company paid $230,419 to the family to rebuild their home.
  • A Joplin woman was having repairs done to her home after the May 2011 Joplin tornado when her contractor found more internal damage. She was having a difficult time getting her insurance company to pay for the additional repairs, as well as the cost of living elsewhere while the home was being repaired. After she contacted the department, the insurance company issued a payment of $122,500 to repair her home as well as payment for her additional living expenses.
  • A Kansas City man filed a complaint with the department when he was told surgery on his daughter was not medically necessary. The department was able to get the insurance company to take a closer look at the request for surgery, which led to a board-certified physician reviewing the records and determining the surgery to be necessary. The daughter underwent the surgery a little more than 30 days after the complaint was filed, and the insurance company paid the $63,116 bill.

In the first half of 2012, the department handled nearly 1,955 formal complaints, while assisting 5,008 consumers in writing and another 10,043 over the telephone.

 The top categories of complaints were:

   By reason

   By line of insurance

  Denial of claim (491)

  Health (531)

  Delay of claim processing (371)

  Auto (401)

  Unsatisfactory offer (276)

  Homeowners (355)

The department's Market Conduct Section has returned more than $1 million to consumers, health care providers and the state as a result of exams and investigations in the first half of the year. Enforcement actions also resulted in nearly $2.1 million in fines paid by insurance companies. Recent settlements with major insurance companies AIG and Aflac netted the Missouri State School Fund $1.7 million.

Market conduct exams and investigations aim to ensure insurance companies are complying with state law in their treatment of customers, including the rates being charged and the way claims are handled. Exams can result in refunds for consumers, fines for companies, changes in business practices and other remedies.

Since 2009, market conduct enforcement actions have generated $8.7 million in payments from insurance companies. The money goes toward refunds for consumers, general revenue and the State School Fund.

Consumers with complaints or questions about insurance claims or policy provisions can call the Insurance Consumer Hotline at 800-726-7390 or file a complaint at insurance.mo.gov.