After last year's tornadoes, the state Division of Insurance received about 50 complaints from people who had difficulties dealing with their insurers.
Photo by Mark M. Murray / The RepublicanPaula Lazzarri stands in front of her home at 196 Winton St., in the East Forest Park section of Springfield. Her home was damaged in the June 1 tornado.
After the June 1 tornado caused heavy damage to her bungalow, R. Paula Lazzari of Springfield said she experienced problems with her home owner’s insurance that were almost as bad as the storm itself.
Lazzari, owner of a home in the East Forest Park section of Springfield for about 35 years, said a staff appraiser for her insurer at first declined to pay for all the tornado damage. The appraiser offered to only finance repairs for a broken window and replacing siding on the back and on one side of her home, plus a power wash for the rest of the siding, she said. Later, the insurer attempted to refuse to renew her policy.
Lazzari hired an independent adjuster, but the adjuster told her that her insurer was not responding to requests for a meeting.
Lazzari sought help from an advocate at the state Division of Insurance – and came away a happy consumer.
“They really are angels,” Lazzari, a retired teacher from private and public schools, said on Tuesday of state officials. “They listen and they back you up.”
After a state official intervened and negotiated with the insurer, the company agreed to pay for new siding on her entire house, a new stockade fence, reconnecting an electric line, new siding on her one-car garage, five new windows, a new roof on her home and two new ceilings, she said.
The company, which is licensed by the state, also later agreed to renew her policy, after initially saying it would drop the policy, said Daniel Rosenfeld, director of communications for the state Office of Consumer Affairs and Business Regulation, which includes the insurance division.
The insurer reversed a “notice of non-renewal” it issued to her on July 26, citing her history of losses, she said. During a 2010 storm, a limb from a neighbor’s oak tree had broken and crushed her two-car garage. At the time, the insurer had paid for a new garage.
Lazzari credited Solmaria Marquez, director of consumer services for the state Division of Insurance. Consumers might find some help in this guide to insurance for homeowners.
She said she was very upset with her dealings with her insurance company. “The injustice of it got me very angry,” she said.
Lazzari, 64, was among many unhappy consumers who received help last year from the state Office of Consumer Affairs & Business Regulation. The state agency on Wednesday held a press conference to release its top five consumer complaints of 2011.
More than 8,300 calls to the state office centered on auto insurance issues. Another 6,500 calls, the second highest amount, focused on health insurance. That was trailed by 3,200 complaints about home improvement contractors, 2,939 on difficulties with used motor vehicles and 2,300 about home insurance.
Barbara Anthony
Barbara Anthony, undersecretary of the state's Office of Consumer Affairs & Business regulation, said she held the event to educate consumers about the help that is available.
"We're here as a resource and a guide to help you when problems arise," Anthony said.
At Wednesday’s press conference, Joseph G. Murphy, the state’s insurance commissioner, said that following the June 1 tornadoes in Western Massachusetts, the state insurance division received about 50 complaints similar to the issues experienced by Lazzari.
In the wake of the tornadoes, about 1,900 insurance claims were filed to cover damage to homes, businesses and motor vehicles, he said.
“For the most part, the industry responded well,” Murphy said.
About 15 complaints, among the most complicated, are still active, he said.
Anthony, state undersecretary of consumer affairs, said the damage caused by the tornadoes in Western Massachusetts caused a spike in complaints about home insurance policies, with many homeowners frustrated their policies did not cover the full cost to repair or replace their homes.
“Read your policy,” Anthony said. “Update them. You never know when a catastrophe is going to strike.”
The increase in auto insurance complaints, she said, appear to stem from the state's recent deregulation of the market, which more than doubled the number of companies selling car insurance in Massachusetts to 31. The law gave consumers more choice, but it also sparked more complaints from consumers.
Most health insurance complaints dealt with people angry at private insurers for not covering a particular service or procedure.
Attorney General Martha M. Coakley's office, the Better Business Bureau, the Federal Trade Commission and the U.S. Postal Service were also part of Wednesday's event at the consumer affairs offices in Boston.
Those with complaints or concerns can contact the attorney general's consumer hotline at 617-727-8400. The Better Business Bureau, which has an office in Worcester that serves Western Massachusetts, also has a hotline, 866-566-9222 , as does the state consumer affairs office, at 888-283-3757. The state Division of Insurance can be reached at 617-521-7794.
Also, the consumer affairs office runs a separate program for consumers seeking protection under the state's so-called Lemon Law for new and leased motor vehicles.
Assistant Attorney General David W. Monahan, deputy chief of the Attorney General's consumer protection division, said loan modification scams related to foreclosure proceedings were the top complaint received by his office last year.
Such schemes, Monahan said, prey on homeowners who are already in financial distress and struggling to save their homes from foreclosure.
Consumers should dismiss any loan modification offer that includes an upfront fee — because such a fee is illegal, he said. Companies that guarantee new loans or lower monthly payments should also not be trusted because such promises are impossible to make.
Identity theft, high pressure sales pitches, home improvement contractors and 'eye-catching' introductory offers also made the attorney general's list of the top complaints.
"There are people out there who want to steal your money, or steal your information," Monahan said. "They don't have a gun, they aren't breaking into your house, but they are trying to steal from you and you need to be savvy enough to protect yourself from that."
Material from the Associated Press was used in this report.