States' insurance hot lines can be of little help to callers

Staying Ahead

June 10, 1996|By JANE BRYANT

NEW YORK -- If you're having a problem with an insurance company, and you don't have an agent to help you out, where do you turn for help? There's only one place: your state's insurance department. All states maintain hot lines to answer questions and handle complaints.

After calling, however, you may wind up even more poorly informed than you were before.

The Center for Insurance Research (CIR) in Cambridge, Mass., a consumer advocacy group, recently published the results of a test it ran in 38 states. The CIR called the people who staff the consumer hot lines, asking basic questions about automobile and health insurance.

In two calls out of three, the testers got wrong or misleading information, unprofessional service, marginally useful data or no help at all, according to Jason Adkins, the CIR's executive director.

The testers also asked about consumer complaints against insurers, and about the prices that specific companies charge. The states gather this data and often it's public information. But only a handful discuss it on the telephone or compile it into a useful buyers' guide.

A number of states said they'd mail some consumer information. Most of them never followed through.

The few brochures that did arrive were generally helpful and well-organized, Adkins said. For health insurance, he singled out New York, Oregon and Vermont. For auto insurance, Arizona, California, Hawaii, Maine, Nevada and Virginia.

Massachusetts and New Mexico ranked among the worst. New Mexico sent biased brochures prepared by an industry trade group, without identifying the source, Adkins said. Massachusetts' idea of "consumer help" was a 3-year-old list of health insurers who did business in the state.

Massachusetts was also one of the hardest states to reach, CIR's testers said. Of 10 calls, only three connected with real people. Callers spent as many as 15 minutes on "hold." Messages left on voice mail were never returned.

My associate, Kate O'Brien Ahlers, tried to call Massachusetts for comment on what CIR had found. Her call was bounced from phone to phone; she was misdirected, then cut off; when she reached a live voice, that voice passed her on to someone else; that "someone else" has yet to reply to two voice mail messages Ahlers left. And this is the land of the Minutemen?

Of course, no answer at all from the hot line may be better than an answer that's wrong.

Consider the risk to a newly fired worker, who asks if he'd have any coverage if he got sick before finding a new health-insurance plan. When the CIR testers asked this question, only one-quarter were informed about their right to COBRA coverage (under COBRA, workers at firms that employ 20 people or more can continue their current group insurance, at their expense, for up to 18 months after leaving their jobs.)

In some cases, the CIR's testers rated the states more highly than they deserved. One question, for example, asked if the state kept records of consumer complaints. Often, the states told the callers not to worry about complaints -- they'd be all right as long as the insurer was licensed in the state. CIR rated that answer as "reasonably adequate." I'd call it misleading. Whether a company is licensed says nothing about how it treats its policyholders.

The CIR did find that insurance departments are pretty easy to locate. They're generally listed under State Government in your telephone book. If you don't find an entry for "insurance," try "attorney general" or "regulatory services." If all else fails, call the information operator.

Pub Date: 6/10/96

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