How to Read a Company's Justified Complaint Ratio Before You Buy
Online reviews tell you how some customers felt on a bad day. The state's complaint data tells you something more useful: how often the Department of Insurance looked at a complaint against a company and decided the customer had a point. It takes about ten minutes to check every company on your shortlist.
What the Consumer Complaint Study is
Insurance Code 12921.1 requires the Department to make complaint and enforcement information on individual insurers public. That includes the number and type of complaints closed in the last full calendar year, with the two prior years for comparison; the share that led to corrective action or a remedy for the consumer, set against those found to be without merit; violations found; enforcement actions; and a ratio of complaints to business written. For private passenger auto, the law says that ratio is measured against car years earned.
The Department publishes this as two studies. The primary one, the Justified Complaint Study, ranks companies by their justified complaint ratio. The secondary one, the Company Performance and Comparison Data Study, shows the outcomes behind the numbers and the alleged violations recorded for each company.
Why "justified" matters
Anyone can complain, and plenty of complaints turn out to have no merit. The law directs the Department to separate meritless complaints so they do not distort an insurer's record, and the Commissioner sets by regulation the criteria for deciding when a complaint is justified. The company also gets a description of each justified complaint at least 30 days before the figures are published. A justified complaint is therefore one the regulator reviewed and upheld, not simply one that was filed.
How to look it up
- Open the Department's Consumer Complaint Study page and choose the automobile insurance composite.
- Find each company by its legal name, which is printed on the quote or declarations page. Brands and legal company names often differ, and a group can include several companies.
- Open the company's profile and read its complaint information section.
Reading what you find
| What you see | What it tells you | The caution |
|---|---|---|
| Justified complaint ratio | Justified complaints closed in the year per 100,000 policies or exposures | Lower is better, but tiny differences between two low ratios mean little |
| Number of justified complaints | The raw count behind the ratio | A small company's ratio can swing on one or two complaints |
| Three years of figures | Whether the record is steady, improving or worsening | One bad year is less telling than a three-year pattern |
| Rank | Where the company sits among those listed | Companies without a ratio are ranked by policy count, so read the ratio, not just the position |
The study counts complaints closed in a given year, whenever they were filed. That keeps the figures consistent but means a recent problem can take a while to show.
How much weight to give it
- Quotes close together at matched coverage: let the complaint record help decide.
- One quote far lower: check the record, and if it is markedly worse over three years, ask the company and the agent about it before buying.
- Never: accept lower limits or missing coverage on the strength of a better ratio. Coverage is what pays the claim.
Add one row to your comparison sheet for the three-year ratio and keep it with the prices. If you want the legal company names for each offer so you can look them up, ask for them through our quote form.
Where this comes from
Get this quoted for your situation
Free quotes from multiple carriers, prepared by a licensed California agent. Two minutes, no obligation.
Get My Free QuoteMore of what callers ask
Is a lower justified complaint ratio always better?
In general it means fewer upheld complaints per policy, but small companies can swing on a handful of complaints. Compare three years and look at the counts as well as the ratio.
Why can't I find the company named in my quote?
Search for the legal company name printed on the quote rather than the brand. Groups operate several companies, and each one is listed separately.
Does the study count complaints that were not justified?
The ranking uses justified complaints. The company performance tables also show other outcomes, including complaints found to be without merit.
Can I file a complaint myself?
Yes. The Department runs a program to investigate consumer complaints and respond to inquiries about insurers, agents and brokers.