Illinois' most complained-about car insurance companies and how consumers can protect themselves

When a driver crashed into Angela Crosby’s car, she assumed that insurance — either hers or the other driver’s — would pay for the $4,200 in damage to her car and cover the medical care for injuries that she and her passenger suffered.Crosby had a policy with American Alliance Casualty Co. of Chicago, for which she paid $529 every six months. At first, the company seemed responsive, says Crosby, 56, a home health care aide who lives in Austin.“Then, all of a sudden, they didn’t want to help me,” she says.It's now more than three and a half years after the wreck, and Crosby still hasn’t been paid.She’s one of hundreds of Illinois consumers who’ve filed complaints or lawsuits against what are known as nonstandard auto insurance companies, like American Alliance. Nonstandard auto insurers are known for covering high-risk drivers with bad records. They also insure many financially struggling drivers who can't afford big-name insurance coverage.A Chicago Sun-Times analysis of Illinois Department of Insurance data has found that nonstandard automobile insurance companies have far higher rates of complaints than better known insurers, leaving unhappy customers among the tens of thousands of drivers these companies insure in Illinois wondering whether they are getting what they pay for.Policyholders of these companies and people who have been involved in wrecks with those drivers complain of delays in paying claims, lowball offers and unfair denials of coverage.Crosby says she was driving her 2018 Chevrolet Cruze on her street when another driver, talking on a phone, suddenly pulled out from being parked and struck the Chevy, sending Crosby and her passenger to the hospital.The other driver showed police an insurance card. And Crosby reported the accident to her insurer, American Alliance, which she says advised her to make a claim under the other driver’s policy.But the driver’s policy had lapsed before the crash, and the woman had a new insurer, which rejected the claim, saying the woman wasn’t an authorized driver. Crosby filed a lawsuit in April 2022 against the driver, a case that's still pending.Frustrated, Crosby then tried to tap her policy’s uninsured motorist coverage in March 2023. But American Alliance told her too much time had passed since the wreck.Crosby is now suing American Alliance in Cook County circuit court, asking a judge to order the company to pay up.She says her car is drivable but still not repaired, a cause of grief every time she looks at the car that she bought new in 2018.American Alliance didn't respond to requests for comment.Attorney Christopher Hoffman of Walner Law, who is representing Crosby, says American Alliance should never have closed Crosby’s claim.“This one made me particularly angry,” Hoffman says of the case.Crosby says she tried to get a policy with a big-name insurer, but it cost too much. In Illinois, auto insurers can use non-driving factors like credit scores, home ownership status, occupation, education, marital status and more to calculate rates. You could even pay more, regardless of your driving record, just because you’re a woman, a Sun-Times investigation in 2019 found.

Related

Car insurance roulette: You could pay more because you’re a woman regardless of driving record

“These low-budget places are taking advantage,” she says. “It’s like why even give us insurance when they are not going to help us?”

Angela Crosby of Austin beside her damaged, still-unrepaired 2018 Chevrolet Cruze.Pat Nabong / Sun-Times

Most complained-about insurersIn the past, the Illinois Department of Insurance posted complaint ratios for auto insurers online to help consumers choose an insurer. The complaint ratio is the number of complaints divided by the total amount of premiums, in millions of dollars, that a company wrote for private passenger liability and damage policies.But the department, which says it's under-resourced, stopped doing that after 2020, saying that state law doesn't require that.So the Sun-Times crunched the numbers for 2021-2023, using complaint data obtained from the state and insurers’ premiums data, available on the department’s website. The analysis included companies with at least 50 complaints in a given year.Eight companies — all offering nonstandard insurance policies — amassed exponentially more complaints than more well-known insurers, the Sun-Times analysis found.In 2023, the companies accounted for 5.28% of the private passenger liability insurance market and 2.85% of the damage insurance — collision and comprehensive — market in Illinois. But they totaled 1,340 complaints, nearly 40% of the 3,370 complaints filed against auto insurers in Illinois. Some highlights:First Chicago Insurance of Bedford Park ranked No. 1 and had 180 complaints filed with the state in 2023. It had $35 million in direct written premiums for private passenger liability and damage policies, resulting in a complaint ratio of 5.14 — the highest in the analysis. To put that in context, that’s 39 times the complaint ratio for the state’s largest insurer, State Farm Mutual, which had 387 complaints but wrote $2.95 billion in premiums for liability and damage, resulting in a ratio of 0.13.United Equitable Insurance and American Heartland Insurance, both owned by United Equitable Group based in Morton Grove, had 160 complaints combined and the second- and fourth-highest complaint ratios. Together, the companies wrote about $43 million in premiums. In 2022, United Equitable ranked first, and American Heartland was third on the complaint list.American Alliance had 488 complaints last year and the third-highest ratio. Its complaint ratio was 28 times higher than State Farm's.The other companies on the list of most complained-about auto insurers in 2023 were American Freedom Insurance, Direct Auto Insurance, Safeway Insurance and Founders Insurance. Several of the companies also appeared in top spots in 2021 and 2022.

Delays and denialsLawsuits, online complaints and one-star reviews provide a sense of why consumers are angry.“We pay our premiums on time every month just to be ignored when needed the most,” a First Chicago customer posted on the nonprofit Better Business Bureau of Chicago’s website. In the past three years, 467 consumers have filed complaints about First Chicago, and 201 people have written reviews, giving it an average of 1.06 of 5 stars on the BBB's site.An American Alliance customer wrote: “I got into a car accident on August 2, 2024. Over a month has passed and my totaled car is still sitting in my driveway with no action on the full coverage insurance to move forward on my behalf. … They continue to ask for the same information over and over. And every additional piece of repeated information I provide gives them an additional 3-5 business days to reevaluate.” American Alliance has 655 complaints with the BBB over the past three years.A woman who says she was hit by a driver insured by Direct Auto wrote that the company’s “client won’t comply … so nothing is being done about fixing my car.”The eight companies identified in the Sun-Times analysis collectively have had 1,939 complaints filed with the BBB over the past three years. Their BBB ratings range from an “F,” for United Equitable and American Heartland, to a “B-” for First Chicago, “B+” for American Alliance and Safeway and “A+” for American Freedom, Direct Auto and Founders. The BBB’s rating system gives credit for prompt responses to complaints, which can raise their grades.Lawsuits filed in Cook County contain similar stories.A United Equitable customer sued after her damage claim was denied because the company said she hadn’t reported an unrelated citation and two accidents more than three years earlier. After her Legal Aid of Chicago lawyer said the consumer hadn't ever been asked to disclose that information, the insurer changed tactics and said it was denying the claim because her niece had been at the wheel.United Equitable’s shifting denials didn’t fly with the judge hearing the case, and the case ended up being settled for an undisclosed amount last November.Legal Aid attorney Laura Rodgers, who filed the suit, says nonstandard insurance customers often buy coverage through independent agents, who submit the online application, swipe the customer's credit card, then hand over a proof-of-insurance card. The actual policy usually is available only online and many people don’t understand the terms.“Companies then take advantage of that,” Rodgers says. “The consumer has very little power to fight.”Hoffman, the lawyer representing Crosby, says some nonstandard insurers hunt for reasons to deny coverage without looking at the facts of the claim.

“They’re not eager to pay, so they will constantly challenge whether a person has met all the conditions for coverage,” attorney Christopher Hoffman says of nonstandard car insurers.Peyton Reich / Sun-Times

“They’re not eager to pay, so they will constantly challenge whether a person has met all the conditions for coverage,” Hoffman says.Sometimes, it’s other insurance companies that end up in court fights with nonstandard insurers.Travelers, the insurer for a condo association in Edgewater, battled for years to get paid after a First Chicago-insured driver lost control of her vehicle in October 2018, hitting several cars and crashing into the condo building, causing extensive damage.Travelers paid $331,625 toward the damaged building and then tried to recover some of those costs from First Chicago. The company offered to pay $18,000 in August 2021 but never sent Travelers a check, according to a lawsuit filed last December.

Several balconies collapsed after a First Chicago-insured driver crashed into an Edgewater condo building near Broadway and Hollywood Avenue in 2018. Linze Rice / Sun-Times

According to First Chicago, the payment was delayed while it waited to get signed settlements from the many parties involved. The case was settled in February.Insurers tough to fightDerick Hall, 46, a mail carrier who lives in Crete, was stopped at a red light on 119th Street, on the border of Morgan Park and Blue Island, last November when another driver rear-ended his 2012 Ford Fusion. Hall says the wreck caused about $3,000 in damage to the rear bumper and sensors.Hall had liability coverage through State Farm, but he didn’t have a collision policy. The other driver showed him a First Chicago insurance card.Hall says a First Chicago claims representative was assigned to the case, but the agent “was just really hard to get hold of," first telling him the company was having a hard time reaching its customer and then, without any explanation, that it was denying his claim.

Derick Hall, seen leaving the Cook County courthouse in Markham, is suing First Chicago Insurance, which insured the driver who rear-ended his car last fall.Anthony Vazquez / Sun-Times

Upset, Hall paid $300 to file a lawsuit against First Chicago in Cook County circuit court. In September, a judge gave him bad news: Under Illinois law, he was told, first he has to sue the driver.First Chicago’s outside corporate counsel Patrick Hincks, of Sullivan Hincks & Conway, says the claim was complicated because the company didn't have a police report or witnesses and no contact from its insured customer.“We have diligently attempted to contact our insured to get necessary information, but, to date, have been unable to have any communication with him,” Hincks says.Hall says he plans to keep fighting.But doing that can be tough.Nonstandard policy limits are usually low, offering minimum liability coverage — in Illinois, it's $25,000 per person and $50,000 per accident for injury or death and $20,000 for property damage. As a result, many lawyers won’t bother taking the cases.And the contract language often makes it hard for anyone to successfully sue a nonstandard car insurer, lawyers say.That’s what happened last year to a North Lawndale woman who sued her nonstandard insurer, Direct Auto. According to her small claims lawsuit, after leaving a doctor’s appointment on a Friday in January 2022, she returned to find her parked Ford Explorer had suffered what turned out to be $1,455 of damage in a hit-and-run.She got a police report the following Monday and gave it to Direct Auto, but the company denied her claim, telling her that, under the terms of her policy, she had to report any accident to the police within 24 hours.“I had this company for a year and paid faithfully; now when I need to use the insurance it’s no good,” she wrote in her lawsuit. She lost the case.‘Higher-risk drivers’Nonstandard insurance company representatives and industry experts say the higher complaint ratios are due in part to the population they serve. The companies typically do business with drivers no one else wants: those with DUIs, lots of speeding tickets and a history of at-fault crashes.They also market to consumers with poor credit scores, immigrants with no credit history and people who’ve let their insurance coverage lapse.In recent years, some of the bigger standard and preferred insurance companies also have entered the market by buying nonstandard insurers or creating subsidiaries targeting this niche.

Have you had a bad experience with an insurance company?

If so, tell your story to reporter Stephanie Zimmermann.

Email me

Hincks, First Chicago’s outside counsel, says it’s misleading to compare the small nonstandard insurers’ complaint ratios to big insurers like State Farm, which has many longtime customers who’ve never filed a claim.Nonstandard customers “are considered higher-risk drivers, meaning they have a history of accidents, traffic violations or poor credit, which can lead to more interactions with their insurance company regarding claims, policy changes and coverage disputes, ultimately resulting in a higher likelihood of complaints,” Hincks says.Nonstandard policies also sometimes have more nuanced rules and restrictions, which can lead to customer confusion, he says. And he says that investigating claims can be difficult when customers refuse to provide contact information because they are worried about their immigration status or have a language barrier.Lynne McChristian, a senior instructor in insurance at the University of Illinois Urbana-Champaign who consults for the American Property Casualty Insurance Association, says nonstandard insurers draw more complaints because of the “churn” of customers seeking lower-cost policies to satisfy the state’s minimum requirements.These companies also encounter fraud more often, which can make handling claims tricky, according to Patrick Sullivan, senior editor for Risk Information, an independent analysis firm in Chicago.“It can be a very volatile, unstable market,” Sullivan says.‘I wasn’t even in the car’ Amy Price, 37, of Des Plaines, says she found herself entangled with a nonstandard insurance company in October 2022 after parking her 2009 Chrysler PT Cruiser in the 3300 block of North Milwaukee Avenue in Avondale outside of her job at LiveWire Lounge before her bartending shift.At about 2:20 a.m., as she and a coworker were getting ready to leave, they were jolted by a boom and the sound of crunching metal. A woman driving a Toyota RAV4 had lost control of her vehicle, veered to the opposite side of the street and slammed into the front left of Price’s car, which got smashed into a car parked behind it, which in turn got dragged by the still-moving Toyota to a spot across the street, where it smashed into yet another parked vehicle.“We hear the ‘screeeeeeee–’, and then I look, and my car is being swept away,” Price says.Her co-worker called 911 and grabbed a fire extinguisher, while Price helped the driver and her passenger out of the overturned car. Price says she spent several more hours at the scene — talking to the police and fending off rogue tow truck drivers — before getting a ride home at 7 a.m.

Price didn’t have collision coverage, which would have paid for the damage to her car. When she tried to pursue a claim under the driver’s policy with Founders, she says she got an unwelcome surprise. The policy had a typical nonstandard limit of $20,000 for property damage, which wouldn’t be able to cover the three parked vehicles that were hit, including Price’s car, which was a total loss. She already had paid off her PT Cruiser.Price says Founders dragged its feet for months and was difficult to reach. She kept getting letters from the company saying it was waiting for the other parties to sign releases.Seven months after the crash, in May 2023, they offered her $3,941, which Price was willing to accept even though she says it was too low.When the release paperwork arrived in November 2023, though, it wasn't for the figure she'd been offered. It was just $2,356, and Price would be barred from suing the driver personally to make up the difference. The insurance company’s offer later went back up to the original amount but with the same clause about not suing the other driver.

Amy Price leans on the side-view mirror of her leased truck outside of Live Wire, 3395 N. Milwaukee Ave., where a driver crashed into and destroyed her parked PT Cruiser and two other vehicles in 2022.Anthony Vazquez / Sun-Times

Meanwhile, Price has been paying $560 a month to lease a pickup truck to get to work.“They’re just basically pinning me into a corner without any option to recover," Price says. "They’re, like, ‘Here you go, here’s your scraps.' I’m zero percent at fault. I wasn’t even in the car.”A spokesman for the Utica National Insurance Group, which is the parent company of Founders, declined to comment.

Amy Price’s parked car after it was hit by a driver who lost control while driving.Provided

Calls for more consequencesDouglas Heller, insurance director for the nonprofit Consumer Federation of America, says state regulators should do more in light of the pattern and volume of complaints against the companies. Because consumers have to have insurance to legally drive, the state has a “special obligation” to make sure insurers are being fair and that people are protected from excessive denials and delays, Heller says.“Every day they don’t pay a claim, they earn interest on that [premium] dollar,” he says. “We’re talking about people who have basically been shut out of the mainline brands. That means there should be extra protection and extra scrutiny.”State insurance regulators can conduct comprehensive reviews — market conduct examinations — when complaints raise questions about a company’s actions.Of the companies with the highest complaint ratios in the Sun-Times analysis, only United Equitable and American Heartland have been looked at in the past five years. That examination, completed in 2021, cited issues with failing to promptly investigate and resolve claims and keep customers informed. Without admitting liability, the companies agreed to a civil forfeiture payment of $70,000. They previously paid $150,000 after a 2016 market conduct exam.Since the 2021 review, which was based on complaints from 2018 and 2019, United Equitable’s complaint ratio has improved, from 8.12 in 2019 — the second-highest of any company that year — to 4.17 in 2023. American Heartland’s also has improved, from 5.8 in 2019 to 3.28 in 2023.Ann Gillespie, the state insurance department's acting director, says her agency follows up on each complaint, giving the company 21 days to respond. If there’s a violation of the law, the department can demand corrective action. If complaints pile up, that can trigger a review."We certainly look to make sure that a company is following the law," she says.But the department has its hands full with other regulatory work, such as making sure health insurers comply with the new Health Care Protection Act and gearing up for the new state-based marketplace for Affordable Care Act health plans, Gillespie says.Gillespie says that, as long as nonstandard insurers’ premiums and underwriting are actuarially sound, they fill a niche for people who have no other options:“If we were to shut down that market, you wouldn't be able to drive your car and get to work."

How to save on car insurance and protect yourself in case of a wreck

If you’re insured by a nonstandard company or hit by a driver who is, there are things you can do to help protect yourself.Nonstandard insurance customerDrivers with DUIs, lots of speeding tickets and a history of accidents get stuck in the nonstandard insurance market.And good drivers with poor credit sometimes can afford only nonstandard insurance. That’s because auto insurers in Illinois can use non-driving factors like credit score, home ownership status, education level and occupation to set rates, though there’s a push in Springfield to change that.Here’s what to know.Read your policy terms carefully. Some companies cancel policies and refuse to pay claims because they say the policyholder didn’t disclose all of the people living in the person’s home — even those who aren’t driving. A California lawsuit against National General, a nonstandard insurer acquired by Illinois-based Allstate in 2021, said the company denied claims of policyholders who hadn’t disclosed the presence of children over age 14 in their household, even though a 14-year-old can’t legally drive.Disclose work-related use of your vehicle, if required. Consumers have had claims denied because they’d used the car to fulfill foo...