Best insurance companies for claims in California and companies with the most complaints

Best insurance companies for claims in California

For California:

American Family has the lowest complaint volume in California, with a score of 3.12 complaints per 1% of market share. That ratio is less than half of the scores for Travelers and Progressive, the two carriers with the next-lowest scores, but all are well below the average of 22.

The table below shows the top five best carriers by NAIC complaint ratios for claims in California. 

Insurance company claims complaints in California

The best company in California for claims is American Family, while the carrier with the highest complaint ratio is Kemper. See the full list of carriers and their claims complaint ratios below.

How do insurance claims work in California?

The claims process in California is overseen by the California Department of Insurance, and carriers must comply with laws governing claims timelines and insurer responsibilities to policyholders.

Bad-faith laws aim to protect Californians from hardships arising from dealing with their insurers. To maintain good faith between insurers and policyholders, California has established laws governing how insurers respond after a claim is filed. Understanding these laws can help you know your rights if your claim is unfairly denied or delayed.

Required timelines under California law:

• Claims must be acknowledged immediately or no later than 15 days after the filing
• Respond to communications immediately or no more than 15 days later
• Accept or deny the claim immediately or no more than 40 days after receiving proof of the claim
• Pay the claim immediately or no more than 30 days after settlement

Additionally, California insurance customers may not know that insurers must meet the above timelines, provide access to any claims documents, and explain in detail why they denied your claim.

Methodology: How this ranking was determined 

We ranked the largest auto and home insurers in each state using two NAIC datasets: state market share for Total Private Passenger Auto and Homeowners Multiple Peril, and closed consumer complaint counts from the NAIC Consumer Information Source.

For each state, we took the top 10 carrier groups by auto market share and the top 10 by homeowners market share and combined the lists. Groups in both were ranked against their auto share; groups in only the homeowners list were ranked against their homeowners share. For each group, we selected the NAIC company code most associated with that line and verified it against actual complaint volume.

The metric, complaints per 1% of market share, divides total closed complaints by the carrier's market-share percentage in that state. Lower is better. Complaint volumes vary by state, so scores are comparable within a state, not across states. As a rule of thumb, a carrier scoring more than 1.5x its state's average draws more complaints than expected for its size, and those scoring more than 2x are significant outliers. State averages are roughly 22 in California, 1.6 in Florida, and 11 in Texas.

Why is claims handling the most important factor when choosing insurance?

Claims handling is the most important factor when choosing insurance because a claim is the reason you buy insurance; it’s what you are paying for with your premiums. Customers need an insurer that communicates quickly and moves through the claims process efficiently. 

Cheap insurance and good insurance can be very different. For example, if you only look at rates, you may get an insurer that unfairly denies or delays claims to cut corners. However, an insurer with a good claims track record may cost a little more. 

An insurer’s claims performance directly affects:

• Payout amounts: A good insurer doesn’t try to underestimate claims costs or delay processing a claim to save money. Quick estimates and independent appraisals can ensure sufficient payouts.
• Stress levels: Clear communication and an efficient claims process can save undue stress. However, an insurer that doesn’t respond or has a complicated process can increase stress.
• Recovery time: The time it takes to process a claim affects how quickly a customer recovers from a loss. A slow claims process can significantly delay recovery.

“When shopping for coverage, consumers should try to learn about the claims experience for the companies they are considering. When you suffer a covered loss, you want to make sure your claim is handled efficiently so you can recover as quickly as possible,” said Mark Friedlander, media relations director for the Insurance Information Institute. “One of the best sources for this type of information is J.D. Power, which rates claims handling in regions across the U.S. You can also check out the National Association of Insurance Commissioners Complaint Index, which tracks consumer complaints for every property/casualtyLiability or loss resulting from an accident. insurer across the country. Your insurance agent can help you with this process.”

National rankings don’t always reflect California's claim behavior because the state has a complicated insurance market. Insurers have a higher-than-average claims denial rate due to the high risk of natural disasters, such as wildfires, and strict regulations. The factors make insurance challenging, as many insurers limit coverage or leave the state.

What are the early warning signs to look for to avoid claims process complications?

Early warning signs of potential claim issues include slow response time, lack of clear communication, aggressive tactics and avoidance of questions and concerns. If you see signs that your adjusterAn adjuster handles claims for the insurance company. They assess the damage and determine how your coverage applies to damages and injuries. isn’t processing your claim in a timely or appropriate fashion, ask to speak to a supervisor immediately, and, if necessary, hire a public adjuster who works on your behalf. By looking for signs of claims issues with a carrier before you buy a policy, you can avoid being in that position in the first place.

Warning signs to look for at the start of a claim include:

• Slow response time. The insurer takes a long time to return phone calls, especially after the initial loss, or doesn’t contact you within a promised time frame.
• Poor communication. The adjuster doesn’t make clear what is expected of you, when you can expect the claim to move forward or how your coverage applies to the claim.
• Aggressive investigation tactics. An insurer pushes a low settlement offer or uses a private investigator to deny a claim.
• Avoiding your questions. The adjuster doesn’t provide direct answers or doesn’t take your questions and concerns seriously.

Before you buy insurance, look for these signs:

• High complaint-to-premium ratio: Insurers with an excessive number of complaints may be difficult to deal with during the claims process. It may be helpful to read some of the complaints to learn possible problems.
• Poor AM Best ratings: AM Best rates companies based on their ability to meet financial obligations. Insurers with a low rating may delay or deny claims if they’re financially unstable.
• Excessive exclusions: A policy with a large number of perils not included can signal that the insurer may try to deny claims. Read through the exclusions carefully to understand what is and is not covered.
• No local claims office in California: A local claims office may make the claims process easier with face-to-face communication. A local agent also understands regional difficulties and can help with the claims process.

How to increase your chances of a successful claim in California

To increase your chances of a successful claim, document everything, be polite and honest with your adjuster, understand your coverage clearly, and be prepared to escalate with a supervisor, the department of insurance or a public adjuster if things aren’t going well.

• Documentation: Document damages, receipts, and anything that can be used in your claim. Also, be sure to take pictures of the damage.
• How to talk to adjusters: Be polite and calm when explaining the facts to your adjuster, and be honest when reviewing the claim.
• Understand your coverage: Read your policy so you know what’s covered and how. Your insurance may pay your claim based on actual cash value (the item’s cost minus depreciation) or the cost to replace it.
• Internal escalation: You may choose to escalate the claim within your insurance company if you’ve had poor communication, a very low offer, a denial with no explanation, or other problems with your insurer. Internal escalation allows the insurer the chance to handle the problem without external action.
• File a DOI complaint: If you are unable to resolve the issue with your insurer, you can file a complaint with the [state] Department of Insurance. They will investigate and resolve the issue.
• Hire a public adjuster: An independent adjuster can look over the claim and offer a second opinion. This can be helpful if you feel your insurer’s offer is too low or if you’re having difficulty communicating with your insurer.

Final verdict: Choosing an insurance company you can count on in a claim

When you’re looking for a new insurer, it’s important to find a company with a good claims track record. An insurer with excellent claims reliability will make the process much easier, and you won’t have to deal with delayed or denied claims, lowering your recovery time significantly.

The best insurance company for you depends on:

• Your coverage type: Some insurers specialize in specific coverages, and working with an insurer well-versed in your coverage needs can make the claims process smoother.
• Risk profile: Insurers estimate how risky you are to the insurer, and understanding your risk profile allows you to learn how likely you are to file a claim.
• Location within California: A local claims office offers personalized service and eliminates claims confusion.

Customers should review their insurance needs at least once a year, as their needs often change and insurers' ratings do as well. Comparing multiple insurers lets you find the one that meets your needs and has excellent claims service. 

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