Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Content Writer & Entrepreneur Shuman Roy

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jun 28, 2022

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Insurance is a tough gig. You’re basically forced to have it, and we all know it isn’t cheap. On top of that, it’s not fun or exciting, and it certainly doesn’t improve your social status.

And while insurance professionals can provide a laundry list of reasons why insurance is necessary, the general consensus is that it’s a huge waste of money (until you actually need it).

There are plenty of formal complaints filed each year against insurers from their clients that believe they got a raw deal after paying insurance premiums month after month.

This post reveals the top five reasons people file formal complaints and the top five complaints by type of coverage. These two factors will give you a snapshot of the top 10 complaints filed out there in the marketplace.

The data is from a few years back, but it’s important to note that the numbers take a while to “come in,” and the rankings do not change much from year to year.

According to data from the National Association of Insurance Commissioners, a total of 195,669 consumer complaints were confirmed in the 2008 calendar year. Keep in mind that the NAIC does not collect all insurance complaint data from all states.

Insurance is not nationally regulated, rather regulated by each state insurance laws, so there are no official national numbers out there for us to provide you.

If you want to complain about your insurance, you can contact your licensed insurance agent, call an executive in the company, ask a third party to medicate your claim dispute, file a complaint with the state department of insurance which controls insurance activity and insurer compliance with state laws and regulations. Moreover, you can ask for arbitration if that’s an option in your policy, or file a legal claim against your company in court.

If you purchased your policy through an agent, you can use this person as an advocate to help you with your complaint form. The state insurance department is also the official complaint complaint-taker for insurance problems. They will investigate your matter and determine if any insurance law has been broken. The number of complaints in the state department of insurance is a matter of public record, because it reveals how many consumers have bought a policy, how much those policies are written for, and the number of complaints. The department of insurance then divides the number of complaints by the policies written and calculates the complaint ratio. If the complaint ratio is high, this indicates that the insurance company is bad.

Top Five Reasons for Insurance Complaints


Total No.





Denial of Claim



Unsatisfactory Settlement/Offer



Premium and Rating






The numbers above reveal the most common reasons why a complaint is filed regardless of the type of insurance we’re dealing with.

While these numbers paint a pretty clear picture of the distaste consumers have for their insurance companies, we should also consider the rank of which lines of insurance cause the most headaches, so here goes…

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Top Five Complaints by Type of Coverage


Total No.


Accident and Health









Life and Annuity



Commercial Multi-Peril



What to consider about these numbers?

Most importantly, you will probably notice that the number of consumer complaints coincide with the overall number of insured in the U.S. There are more health insurance policies than car insurance policies and so on down the line.

Also, it’s important to note that the average American does not read and fully understand their insurance coverage and probably expects money to come quickly (and without dispute) after a loss.

Much of the disappointment related to item number one on the list is related to the U.S. justice system, which moves slowly.

Often, insurance claims that aren’t cut-and-dry wind up in arbitration or court, and no settlements are paid until the fat lady sings. This rarely occurs at the speed someone expects when they have suffered an insured loss.

Many claim denial complaints (number 2 on the list) would be pretty clear-cut if everyone read and understood their policies. Many people mistakenly believe that their premium dollars are exchanged for a guarantee that they will never have an uninsured loss.

Item number 3 on the list is also a hot complaint topic due to a general public misconception of how insurance works.

The concept of insurance is to get us back to EXACTLY where we were prior to our loss. Much of the public believes that an insurance claim is similar to a winning lottery ticket and expects a windfall for their loss. This is simply not the case.

Remember, insurers bank on the fact that you most likely won’t switch insurance companies. Retention rates are high in the insurance world, and even though every commercial out there talks about switching, most people leave their policies untouched.

If you don’t like who you’re with, shop around – there are plenty of companies out there willing to take your premium dollar, and there’s a decent chance they’ll do so for cheaper than your existing carrier!

Read more: How to negotiate with insurance companies.

(photo: aturkus)