Piedmont Mutual Insurance Review: Homeowners Insurance Complaints, AM Best, BBB, & JD Power Ratings

How good is Piedmont Mutual Insurance? Does it have a lot of customer complaints? How does it stack up compared to competing home insurance companies? This blog post will review Piedmont Mutual, its AM Best or Demotech financial strength ratings, JD Power customer satisfaction ratings, Better Business Bureau ratings, and its home insurance complaint record over the last 5 years. Unfortunately, the news is not good for Piedmont Mutual customers, but I’ll show you some other company options, which may be a better choice for you, and increase the odds you’ll be happy if you have a claim. You may also be able to save a lot of money, too.

 


Piedmont Mutual Insurance Company Review

This Piedmont Mutual Insurance Company review is divided into five parts, consisting of: 1. A company overview of its history, website, and how to get a property insurance quote, 2. The AM Best Financial Strength ratings for Piedmont Mutual Insurance Company, 3. The JD Power customer satisfaction ratings and BBB rating for Piedmont Mutual Insurance Company, 4. the homeowners insurance customer complaint record for Piedmont Mutual Insurance Company over the last five years, 5. Competing insurance companies which may be a better option for you than Piedmont Mutual.


1. Piedmont Mutual Insurance Company History & Website

Piedmont Mutual has been licensed to offer insurance since March of 1993, and sells property insurance in North Carolina only. Piedmont offers standard home insurance, and also nonstandard home insurance, for those property owners having difficulty qualifying for standard home insurance with other companies, due to recent claims history, the condition of the property, or other reasons. Piedmont sells insurance through local independent insurance agents in your community. You can find agents close to you by visiting the company website at Piedmont Mutual Insurance Company.

Piedmont Mutual Insurance Company Home Insurance Market Share in North Carolina

Piedmont Mutual has a very small share of the North Carolina home insurance market, earning only $1,787,726 in annual premium for all home insurance policies sold in 2011. As a comparison, State Farm Fire & Casualty Insurance, one of the largest insurers of homes in North Carolina, earned $383,175,444 in annual premium for all home insurance policies it sold. Even many other companies with a small share of the NC home insurance market, have many more customers than Piedmont Mutual. For example, SAFECO Insurance Company of America sold $6,669,206 of annual home insurance premium in NC for 2011, which is more than three times the amount of Piedmont Mutual. Since 2011, the NC home insurance market share Piedmont Mutual has decreased, but if you are having trouble finding a company to insure your home or a property you own, it may be a good choice for you.


2. Piedmont Mutual Insurance Company AM Best & Demotech Financial Ratings

AM Best, the most well-known of the insurance company rating agencies, does not rate Piedmont Mutual. This is not unusual for AM Best to not rate very small companies, which have been in existence a fairly short time (Since 1993, for Piedmont Mutual). On its website, Piedmont Mutual explains companies reinsuring it are AM Best rated, but this is not a substitute for the company’s financial situation being evaluated by AM Best.

However, Piedmont Mutual is rated by a company called Demotech, Inc., which rates some smaller or newer insurance companies not rated by other insurance company rating agencies, like AM Best, Moodys, Fitch, Weiss or Standard & Poor. Piedmont Mutual Insurance Company had its A (Exceptional) Demotech financial stability rating affirmed on 11/22/2014. The rating of “A” is the third highest Demotech rating.

A greater concern for me is Piedmont Mutual discloses on its website it is a “limited assessable” mutual company. I like mutual companies because, unlike companies with stockholders, the company’s policyholders own the company. Some mutual companies, like Amica Mutual, are known for paying dividends, if there is a company profit for the year. Most mutuals don’t pay dividends, but try to reward their customers with lower rates. The potential downside of a mutual company is, if claims & operating costs are greater than the premium paid, the policyholders, as owners of the company, can be assessed a portion of the shortfall.

For example, if the company earned a million dollars of premium, but expenses were 1.1 million dollars for the year, the $100,000 shortage could be assessed to the 500 policyholders, each having to pay $200.

Most mutual companies are “non-assessable” mutual companies, where policyholders never have to pay for the losses of the company. Piedmont Mutual, is a “limited assessable” mutual, which means Piedmont Mutual policyholders may face situations where they must pay more than their annual insurance premiums.

You may speak to a Piedmont Mutual agent, and the agent may tell you no policyholders have ever been assessed in the company’s history. The agent may also say there is no possible scenario where policyholders would need to pay an assessment, due to a reinsurance program, or other reasons. But if there really was no situation where policyholders will be assessed, there would be no reason for Piedmont to be a “limited assessable” mutual, instead of a non-assessable mutual.

Due to no financial ratings, and the possibility of assessments, I would not choose Piedmont Mutual to insure my home, unless I had no other reasonable option with comparable coverage.


3. Piedmont Mutual Insurance Company JD Power Ratings & BBB Rating

Piedmont Mutual Insurance Company, like many other single state or regional insurance companies, does not have enough customers at this time in any one state, region, or nationally to be included in any of the recent annual JD Power insurance customer satisfaction studies, which evaluate the largest national and regional auto or homeowners insurance companies in the USA. Not being included in a JD Power insurance study does not make an insurance company better or worse than large or JD Power rated companies, but it does make it harder to evaluate the quality of customer service provided by a company not rated by JD Power, like Piedmont Mutual Insurance Company.

Piedmont Mutual Insurance Company is rated “A-” by the Better Business Bureau, which is the third highest rating from the BBB, and the company is not currently BBB accredited. Piedmont Mutual had only one BBB complaint in the last three years, with no complaints occurring in the last 12 months, for the category of a problem with service, and the complaint has been closed and resolved with the assistance of the BBB. The Better Business Bureau states the reason for the lower rating because the BBB does not have sufficient background information on this business.

Although most customer complaints are best directed toward a customer’s state department of insurance, the Better Business Bureau is a well-known and popular choice for consumers filing complaints against a company. If many customers are having so much trouble resolving an issue with their insurance company, they take the time to contact the Better Business Bureau about it, it’s a pretty good sign customers in general may be unhappy with the service provided by their insurance company. If a lot of complaints are made to the BBB about a company, in greater numbers than similar-sized insurance companies, it’s reflected in the BBB rating, and is one indicator the company may have more dissatisfied customers than some of its competitors.

I don’t trust an A+ BBB rating to be a reliable indication of a good auto insurance company, but a lower than “A” rating should be considered as a sign of below average customer service. The Better Business Bureau rating at this time for Piedmont Mutual Insurance Company should not be a concern for its customers.

Source: BBB ratings for Piedmont Mutual Insurance Company


4. Piedmont Mutual Home Insurance Complaints

The home insurance (homeowners and mobile homes) complaint statistics for Piedmont Mutual Insurance Company listed below display the ratio of the company’s U.S. Market Share of closed complaints compared to its U.S. Market Share of premiums for a specific policy type (in this case, homeowners & mobile home insurance). Complaint ratios lower than “1” have less complaints than average, and complaint ratios over “1” have more complaints than average. The lower the complaint ratio, the less complaints against the company. Ideally, you want to choose an insurance company with complaint ratios much less than 1.00 each year, over the last three years.

So you don’t have to worry about comparing complaint ratio numbers, I devised a rating system to help you identify a good or poor complaint record.

Here’s how I establish my homeowners insurance complaint ratings:

B = Better than average. Insurance companies with complaint ratios less than 75% of the average insurance company.

C = Average. Insurance companies with complaint ratios from 75% to 125% of the average insurance company. I use a minus sign (-) to indicate auto insurance complaint ratios slightly worse than average (1.01 to 1.25) and a plus sign (+) for auto insurance complaint ratios slightly better than average (.99 to .75).

W = Worse than average. Insurance companies with complaint ratios more than 125% of the average insurance company.

Piedmont Mutual Insurance Company Homeowners Insurance Complaint Statistics & Ratings

B = Better than Average C = Average W = Worse than Average

2013 Home Insurance Complaint Ratio = B (0) (No complaints)

2013 US home insurance premium = $1,628,078

For 2013, Piedmont Mutual had 10 home insurance complaints filed with the North Carolina Department of Insurance, which counts all complaints, whether they are determined justified or not, once they have been investigated. According to the National Association of Insurance Commissioners website, no homeowners insurance complaints filed against Piedmont Mutual were justified.

2012 Home Insurance Complaint Ratio = W (6.25)

2012 US home insurance premium = $1,298,507

For 2012, Piedmont Mutual has one homeowners insurance complaint for denial of a claim, which was resolved with a compromised settlement. The complaint ratio is much worse than average because of the 2012 home insurance market share for is very small, where only one complaint has a huge impact on its complaint ratio. Piedmont Mutual had 12 home insurance complaints filed with the North Carolina Department of Insurance.

2011 Home Insurance Complaint Ratio = W (9.06)

2011 US home insurance premium = $1,787,726

For 2011, Piedmont Mutual had 30 home insurance complaints filed with the North Carolina Department of Insurance, which as previously stated, counts all complaints, whether they are determined justified or not, once they have been investigated. According to the National Association of Insurance Commissioners website, two homeowners insurance complaints filed against Piedmont Mutual were justified. Both of the complaints were resolved by a compromised settlement between the claimant and the insurance company.

For perspective, Auto-Owners Insurance Company, a company with more than 20 times the home insurance market share in North Carolina for 2011 than Piedmont Mutual ( $36,151,880 annual premiums collected for Auto-Owners, as opposed to $1,787,726 annual premiums collected by Piedmont Mutual), had 28 complaints filed against it with the North Carolina Department of Insurance, which is two less complaints than Piedmont had in 2011.

Foremost Insurance Company of Grand Rapids, MI had the same number of four verified property insurance complaints against it in North Carolina for 2011, but Foremost has more than 10 times the 2011 home insurance market share in NC, than Piedmont Mutual ( Foremost at $19,686,538 annual premiums versus Piedmont Mutual at $1,787,726 annual premiums).

Piedmont Mutual has a much higher rate of complaints than other companies, considering it’s market share. Also troubling is the valid complaints are regarding fair & timely claims settlement.

When considering valid complaints as provided by the National Association of Insurance Commissioners (NAIC), Piedmont Mutual has a much higher percentage of complaints than other companies, when you adjust for market share.

2010 Home Insurance Complaint Ratio = W (5.05)

2010 US home insurance premium = $1,809,457

For 2010, Piedmont Mutual had only one homeowners insurance complaint. Due to the very small market share of Piedmont Mutual, as much as 1 complaint makes the complaint ratio go from perfect 0.00 (No complaints) to 5.05 — five times the industry average.

2009 Home Insurance Complaint Ratio = B (0) (No complaints)

2009 US home insurance premium = $1,139,865

North Carolina determines its own home insurance complaint index, based on the number of filed claims (verified & unverified) per one million dollars of home insurance premium earned each year. Here are the results for the last five years:


North Carolina Home Insurance Complaint Ratios for Piedmont Mutual Insurance Company

2013 = 6.14 (10 complaints)

2012 = 9.24 (12 complaints)

2011 = 16.78 (30 complaints)

2010 = 3.32 (6 complaints)

2009 = 1.75 (2 complaints)

2008 = 0.00 (0 complaints)

2007 = 5.17 (3 complaints)

By way of comparison, Foremost Insurance Company of Grand Rapids, MI had a 2011 North Carolina complaint ratio of .36 and 7 filed complaints. This is a much better complaint record, as Foremost insures many more homes in NC than Piedmont Mutual, so has less complaints per number of homes insured.

The bottom line: At this time, the complaint record for Piedmont Mutual Insurance Company is statistically high, and higher than leading competitors in most years.


5. Home Insurance Company Alternatives to Piedmont Mutual

Many people may have chosen to insure with Piedmont Mutual because they do not qualify for home insurance with most companies.

If the reasons you could not qualify for other insurance companies have changed, for example you have a prior history of claims, but they are now older than five years, you may have much more choice in choosing an insurance company. Likewise, if you are a Piedmont Mutual customer insured under their standard home insurance product, you may have your choice of many companies.

To find a better home insurance company, please see my blog post about the complaint ratings for the top home insurance companies in North Carolina.

If you still have problems finding insurance companies willing to insure your home, Foremost Insurance, as compared above to Piedmont Mutual, may be a better option for you.

It pays to shop. Some insurance companies charge twice as much as other companies for the same coverage. Many people pay too much for their insurance because they never shop for better rates, or if they do shop, they don’t check the rates of enough companies. No single company has low rates for everyone. You have to shop with all the leading companies, to find the company with the best coverage and best price for you. If you have had claims, you may not have many options for your home insurance, and you may have to pay higher rates. Remember, shopping for lower auto insurance rates can help afford higher home insurance rates. The ad below will take you to links to get online quotes from leading Home, Auto, Health, & Life insurance companies in your area. Choose the type of insurance, put in your zip, and start shopping now!

Did this Piedmont Mutual home insurance review explain what you need to know about the company? Tell me about it. Please leave a comment on my facebook page. Follow me on Twitter for important insurance consumer news and new blog entries at CarInsWatch.