Articles Posted in Consumer Protection

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The Missouri Department of Insurance recently announced a settlement they reached with Nationwide Insurance Company and Farmland Insurance Company for mistreatment of their policyholders. In market conduct examinations, the MODOI found that these companies didn’t apply the same standards to all customers, improperly calculated Second Injury Fund rates and utilized base rates they hadn’t filed with the MODOI as required. For more information about this settlement, which netted policyholders $250,000 collectively, read the press release here.

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The Missouri Department of Insurance is encouraging families to review their insurance policies to see what is covered while students are away at college.

“It’s important that students and parents discuss their insurance coverage now” said John M. Huff, director of the Department of Insurance. “You don’t want to wait until you need to file a claim to find out whether you have insurance coverage.”

The director of Missouri Department of Insurance advises that insurance needs and coverage may change when a student leaves for college. Here are some tips for families to assist them and make sure that their college-bound students are properly covered:

  • Auto insurance: If your child is taking a car to college, check with your insurance agent. The price and coverage of your policy may change based on the city and state where your child will live. Additionally, see if your insurance company offers a discount for a student’s good grades.
  • Homeowners and renters insurance: Ask your agent if your child’s possessions will be covered under your homeowners policy. Some policies cover a student’s possessions if they live on campus. For students living off campus, consider renters insurance, which is quite reasonable.
  • Health insurance: Most young adults can stay on their parents’ health insurance up to age 26, regardless of marital status, financial dependency, residence or enrollment in school. Students should take copies of their insurance cards and check their parents’ health insurance plans to know which physicians and hospitals are in their network while away at school.

The department also encourages college students and all consumers to complete a home inventory, which is an itemized checklist of all possessions. A home inventory can make the process of filing a claim much more efficient in the event of fire, storm damage or theft.

To read more on this topic, as well as find some educational videos and useful checklists, please check out the Missouri Department of Insurance Website.

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The Missouri Department of Insurance is premiering its new auto insurance guide. This guide is aimed at first-time auto insurance buyers, and provides information to help better understand details of buying car insurance.

“Missouri has a very competitive insurance market with nearly 200 companies offering auto insurance,” said John M. Huff, director of the Department of Insurance. “Consumers should take advantage of this market by understanding how auto insurance works. This guide provides detailed information that can help consumers make an informed decision when they are looking to insure their vehicle.”

The guide outlines minimum auto coverage required by state law and optional coverage, and also provides tips to lower your insurance premiums. It comes with a worksheet to help you find the best coverage and rates. The guide also includes helpful questions to ask an insurance agent during the shopping process.

Other topics covered include:
•What to do if you are involved in an accident.
•Easy-to-scan QR codes to download the NAIC’s WreckCheck mobile app (for your iPhone or Android smartphone).
•Who is covered by your auto policy.
•What is not covered in your policy.
•How to file a claim.
•How to read a declarations page.

You may download the guide here.

Read more here.

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The Missouri Department of Insurance announced recently 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 had the most complaints in the first quarter of 2013 with 309 formal complaints. This was followed by auto and homeowners insurance. The top reason for complaints in the first quarter was claim denial. Delay of claim processing and unsatisfactory offer were also top complaints.

Read more here.

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Across the country, auto repair shops, customers, and regulators are questioning some insurers on their insistence on using salvaged parts or copies made by independent manufacturers. This practice commonly reduces the cost of fixing vehicles damaged in accidents or storms. The negative to this practice is that using such parts may result in substandard fixes, and they may not be covered under the vehicle’s original warranties.

Last December, Boston insurance giant Liberty Mutual was ordered by a West Virginia court to stop using parts salvaged from junkyards to fix newer cars. Additionally, California regulators tightened their rules for using reproduction parts in January of this year. Repair shops in other states are considering lobbying state regulators to require insurers to pay for new parts for vehicles that are still under warranty (or with less than 36,000 miles).

Automakers such as Ford and General Motors warn customers against using salvaged parts or generic copies. Additionally, some repair shop owners and consumer advocates agree that alternative parts don’t always fit correctly or match the performance of new licensed parts.

Regulations in many states require insurance companies to tell customers what type of parts are being used in repairs. Critics say the information is sometimes buried in stacks of paperwork.

According to the Property Casualty Insurers Association of America, approximately a third of the parts used to repair vehicles at auto body shops across the country involve used parts, reproductions by independent vendors, or re-manufactured parts. Used, reproduction and copies usually cost 20 to 60 percent less than new parts, which helps to reduce the cost of repairs. The insurers association estimates US insurance companies could potentially spend an additional $2.4 billion a year if in fact they had to rely exclusively on new parts. This practice would force them to increase premiums for the consumer by about 3 percent.

A Liberty Mutual spokesman said the company is still considering its legal options regarding this issue, but has stopped requiring the use of old parts in West Virginia. The spokesman said his company requires all parts be in good condition and offers its own warranty on those parts for the life of the car.

Read more at the Boston Globe.

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Household incomes have definitely decreased over the last three years. Consumers who are willing to do some research and make some changes may be able to stretch those limited dollars.

One financial resolution we can make is to compare insurance among several different companies. Call some competing companies and ask for a quote. Always make sure you are comparing the same kind of coverage you currently have with the coverage you are considering replacing it with.

When it comes to auto and homeowners insurance, the amount of the deductible influences the rate. The higher the deductible — the lower the premium. By assuming more of the risk yourself, you can reduce those insurance payments. Just make sure you can afford to pay the higher deductible in the event you must make a claim.

The beginning of a new year is a perfect time to do that. You can read more money-saving tips for 2013 here.

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State of Missouri insurance regulators report one of the nation’s largest health insurance companies has for years been violating Missouri law in health plans it offers to employers. The insurance director has announced a settlement with Aetna Life Insurance Company. This settlement is related to its coverage of health benefits required by Missouri law, including autism, contraception and elective abortion.
In the settlement, Aetna admits to several violations of Missouri law, including issuing health insurance policies that excluded coverage for autism spectrum disorders, in violation of Missouri’s landmark autism insurance law signed by Gov. Nixon in 2010. Other violations include issuing health insurance policies that routinely provided coverage for elective abortions and contraceptives.

“This settlement should be a reminder to all health benefit plans covering Missourians, that state law has stringent requirements honoring the religious and moral beliefs of insurance customers,” said the Director of Insurance. “We will be enforcing Missouri’s decade-old contraception coverage law, as well as the new law on the subject, anywhere we see violations.”
Under the settlement, Aetna will stop issuing health insurance policies that violate Missouri law. Additionally, Aetna will pay a $1.5 million penalty, the largest in Missouri history for insurance law violations. They will follow up and notify customers that they were entitled to autism treatment coverage, and accept autism treatment claims since the law went into effect. Aetna will pay said autism treatment claims with nine percent interest. Additionally, Aetna will donate $250,000 to a Missouri nonprofit organization specializing in the care and treatment of autism spectrum disorders.
Aetna is Missouri’s sixth largest health insurance company, with premium sales of $340 million in 2011.

To read more on this insurance news article, please go here.

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An agreement with Allianz Life Insurance Company of North America has been made to resolve consumer complaints about improper sales of annuities. The Missouri Department of Insurance and regulators in Iowa, Minnesota and Florida led a nationwide investigation into Allianz.

Annuities are investment products sold by insurance companies. Consumers buy annuities as way to generate interest on their savings, generate income, or both. The consumer pays a lump sum or makes periodic payments to the insurance company offering the annuity. In exchange, the annuity accumulates value or provides periodic payments to the consumer.
The settlement requires the company to review complaints from consumers who believe policies were misrepresented to them or unsuitable for them. Consumers who have not yet filed complaints with Allianz can file until March 31, 2013.
“Of all the insurance policies available to Missouri consumers, annuities can be the most complex and confusing,” said John M. Huff, director of the Missouri Department of Insurance. “Allianz customers can now have their cases reviewed to ensure they’ve been treated fairly.”
Allianz in 2011 sold more than $206 million in annuities in Missouri, making it the state’s eight-largest seller of annuities. As required by the settlement, Allianz has paid a fine of $257,000, to the Missouri state school fund.
In market conduct exams and investigations, the Department of Insurance reviews insurance company practices regarding the treatment of policyholders. This includes the way premium rates are charged, the way insurers handle claims and other responsibilities under state law. These reviews sometimes result in refunds for consumers, fines and corrections in business practices, as well as other remedies. Since the beginning of 2009, Market Conduct enforcement actions have generated $9.8 million in payments from insurance companies. The money goes toward refunds for consumers, General Revenue and the Missouri State School Fund.
For more information on the Allianz settlement, please go to this Missouri Department of Insurance news release.

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Homeowners buy insurance to protect against disaster. However, when disaster strikes, your insurer might not meet your expectations, especially if you have a large claim. This is according to a Consumer Reports survey of 11,250 subscribers who filed claims in the last few years.

The greater the damages, the more likely it is that home insurers paid less than expected. Nearly 10 percent of respondents reported disagreements with their insurer over the amount of a claim payment. The percentage increased when damage was $25,000 or more — 19 percent disagreed with their insurer’s amount of what was due.

Insurers have transferred the risk of damage from severe weather events to policyholders through higher deductibles. This includes claims stemming from hurricanes, wind, and hail. So, instead of the typical $250 – $1,000 deductible under standard coverage, a homeowner may have to pay 1 to 5 percent of the home’s insured value (this can be up to 10 percent in Florida). For example, if the home is insured for $200,000 and the policy has a 3 percent deductible for hurricanes, the homeowner has to pay $6,000 out-of-pocket for a storm-related claim. Additionally, many insurers have abandoned hurricane-prone areas.

Insurers are also using contract language to avoid paying claims. For example, you may think you have hail coverage and everything will be paid for in the event of a hail storm. However, if your roof is more than 10 or 15 years old, hail damage could be excluded.

Add to this set of complications the fact that premiums have increased by 5 to 10 percent annually in recent years (depending on the region). Hikes of up to 12 percent are predicted soon.

An average homeowner files a claim only once every 6 years. Many policyholders do not read disclosures, renewal contracts, and updates that insurers send them. Therefore, many homeowners are facing unpleasant surprises should they file a claim.

Consumer Reports has advice for the homeowner who is shopping for insurance. You can read more about this here.

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The Missouri Department of Insurance states some insurance companies are setting unreasonable timelines for Joplin homeowners attempting to rebuild after the May 22nd tornado. The department issued a bulletin to the industry stating many home and business owners can’t be expected to rebuild within the time limits required by some insurance policies.

In the bulletin, John M. Huff, director of the Department of Insurance, states the unprecedented scale of the Joplin tornado prevented many consumers from access to their property and led to a temporary building cessation. He also says the widespread devastation has left the entire area with a shortage of contractors and materials. This has clearly made it impossible for many property owners to rebuild within six months. Six months is the time frame that insurance policies require before paying full benefits.

The bulletin says insurance companies attempting to enforce deadlines of less than one year may face legal action by the department.

Per Huff: “The insurance industry has done a commendable job responding to the tornado, having paid more than a billion dollars in claims so far. At the same time, Missouri law requires insurers to provide prompt, fair and equitable settlements to their policyholders, and rigid deadlines may violate that law.”

Huff expects the dollar figure for claims paid in homeowners, auto and commercial property to approach $2 billion by the time all claims are settled. Policyholders have filed nearly 18,000 insurance claims.

Read more here.