Insurance Problems Faced by Consumers

Customers in the United States can purchase almost any kind of insurance imaginable. Insurance companies sell coverage for pets, homes, rentals and travel. Some kinds of insurance are optional and some are mandatory; most states have laws requiring motorists to have a minimum level of auto liability insurance, and federal laws requiring citizens to have health insurance go into effect in 2014. There is no denying, however, that insurance, which is supposed to provide help and peace of mind, comes with its own set of problems.

High Costs

• One of the biggest complaints consumers have concerning insurance (especially health insurance) is that it is too expensive. According to a 2009 article in USA Today, the average family health insurance policy cost $13,375 per year, more than some cars. Insurance requires monthly premiums and most also come with annual deductibles, which the customer must pay before insurance coverage begins. Insurance may also have copayments and coinsurance, where the customer pays a set fee or percentage of the fee for services.

Price Increases

• Though many types of insurance primarily offer protection against emergencies and accidents, consumers complain that they face premium increases if they ever need to actually use it. This happens frequently with auto coverage. Car insurance premiums almost always rise if the policyholder is found to be at fault for an accident, and sometimes even if he wasn't, if the driver has a history of traffic tickets or other accident claims.

Declined for Coverage

• People with chronic or serious health conditions are most in need of health insurance. But they may also be declined for it because the risks are too high for the company. State health pools exist for people who have been denied or otherwise lost their health insurance, but state pool high-risk insurance can also be expensive, charging 125 to 200 percent of what the same insurance would cost a person buying from a private company.

Denied Claims

• Another frustration is when claims are denied. The company cannot deny a claim without reason, but customers often have a hard time understanding what the reason is. Fraud or duplication will cause a claim to be denied, but so may the fact that the claim was not filed within a certain time frame or if a medical biller assigns the wrong code. Health insurance companies may also refuse to honor claims if it involves a pre-existing condition. Homeowners may file claims only to find their homeowners insurance does not cover their damages at all, as is often the case of floods or other natural disasters.