PEMCO Review: Auto, Home, Condo, Renters, Boat Insurance

PEMCO is a regional insurance company headquartered in Seattle, WA., selling auto, home, & boat insurance coverage direct to consumers in the states of Oregon & Washington, and through independent insurance agencies located in some communities in these two states. PEMCO was the JD Power award winner for auto insurance customer satisfaction in the Northwest region for 2013 & 2014. PEMCO has had some limited TV advertising recently, but many residents of OR or WA may still be unfamiliar with PEMCO. My review will look at the strengths and weaknesses of insuring with PEMCO, and how it sells its insurance coverage. This review analyzes the JD Power customer satisfaction ratings, AM Best financial strength ratings, and the most recent three-year home & auto insurance customer complaint records for PEMCO Insurance, and compares them with major competitors like Allstate, State Farm, GEICO, Nationwide, Safeco, American Family, & Farmers. Once you read this review, you’ll know how to decide if PEMCO Insurance is a good choice to insure your car, home, or boat.

PEMCO Insurance has been around since 1949, originally created for the purpose of insuring teachers who were members of the School Employees Credit Union of Washington. Now, PEMCO is available to all Oregon & Washington residents qualifying for its auto, home, or boat insurance coverage. PEMCO is a mutual insurance company, which means the company is owned by its policyholders, instead of having stockholders. Many auto & home insurance companies are organized as mutual companies, and although there is no need for a mutual company to maximize profit, since mutual companies have no stockholders, it should not be assumed mutual companies will have lower rates than other types of insurance companies.


PEMCO Insurance Review

How to get a PEMCO auto insurance (or other type of PEMCO insurance) price quote

You can obtain price quotes from PEMCO Insurance by visiting the PEMCO website and either call the company, request a quote online, or see if there is an independent insurance agency representing PEMCO in a community near you, to contact for auto, home, or boat insurance price quotes. In my experience, speaking with an agent or the company directly is the best way to get an accurate price quote. PEMCO is available in the states of Oregon & Washington only. So, if your home and cars are located in either of these two state, PEMCO can insure them if you qualify for coverage. But if you have a vacation home in another state, like California or Idaho, PEMCO cannot insure the property.

Types of insurance offered by PEMCO Insurance

PEMCO sells auto, homeowners, condominium, renters, boat, and umbrella liability insurance policies to customers qualifying under its “preferred risk” selection criteria. Many insurance companies limit themselves to insuring only preferred risk customers, or have subsidiary companies eligible only to preferred risk applicants. Preferred risk auto insurance companies often have the lowest rates (or the lowest rates offered by the parent insurance company), but can be frustrating to consumers, because many people will not qualify for them, for various reasons. Sometimes, having only one thing against you, like one minor speeding ticket in the last three years, or two not-at-fault accidents, or owning a certain model of car, can disqualify you. With many insurance companies these days, the rules for qualifying are extensive, and look at multiple factors, so don’t think you need to be a perfect example of a low insurance risk to qualify. But if you, or a driver in your household, has multiple accidents or tickets, you may want to skip contacting PEMCO. Likewise, if you have had property insurance claims in the last five years, you may be ineligible for PEMCO property (homeowners, renters, condo) insurance.

PEMCO doe not insure motorcycles, jet skis, snowmobiles, antique, and many other types of vehicles. If you are contacting an independent insurance agent representing PEMCO to get price quotes, these agents can quote you other companies if you do not qualify for PEMCO, or own a vehicle or home PEMCO does not insure.

The rest of this PEMCO Insurance review is divided into six parts, consisting of: 1. The AM Best Financial Strength ratings for the PEMCO insurance companies, 2. Any recent JD Power ratings for PEMCO Insurance, 3. the auto insurance customer complaint ratings for the PEMCO Insurance companies, 4. the home insurance customer complaint ratings for the PEMCO Insurance companies, 5. PEMCO Insurance customer complaints compared to four major competitors — State Farm, Allstate, Progressive, & GEICO 6. a PEMCO Insurance review summary, either recommending PEMCO Insurance, or suggesting other companies as better choices for your auto, home, or boat insurance.

1. AM Best Financial Strength Rating for PEMCO Mutual Insurance Company

PEMCO Mutual Insurance Company had its “A-” (Excellent) AM Best Financial Strength Rating with a negative outlook (a possible ratings downgrade may occur in the near future) reaffirmed on 01/20/2015. The AM Best rating of “A-“ is the fourth highest rating for AM Best. The AM Best financial strength ratings for PEMCO Mutual Insurance Company is not a measure of customer service or the quality of the company’s claims adjusting, but an opinion about its ability to pay claims, remain financially solvent, and stay in business. I recommend avoiding, if possible or practical, any auto, property insurance company with lower than an “A-” rating for financial strength from AM Best.

Source: PEMCO Mutual Insurance Company AM Best ratings

2. JD Power US Auto Insurance Customer Satisfaction Study Ratings for PEMCO Insurance

The yearly JD Power Auto Insurance Customer Satisfaction Studies now consists of many regional or single state studies. PEMCO is included in just one regional study, the Northwest (Idaho, Montana, Oregon, Washington, & Wyoming) study, which is understandable, because PEMCO is available in the states of Oregon & Washington only. I’ll compare the JD Power Northwest regional study scores and ratings in 2013 & 2014 for PEMCO Insurance — the only two years where there has been a Northwest regional study, and the only JD Power studies where PEMCO has been included — with other major auto insurance companies, such as Allstate, State Farm, Progressive, Safeco, American Family, Farmers, etc.

2015 Northwest Study

PEMCO scored 20 points (on a 1,000 point scale) or 2% above the 2015 Northwest region average, at 837 out of 1,000 points.

Here is how PEMCO rated in the Northwest Region for the five factors used to determine its overall auto insurance customer satisfaction score in 2015:

Policy Offerings: Four Power Circles (better than most)

Price: Four Power Circles (better than most)

Billing & Payment: Five Power Circles (among the best)

Interaction: Five Power Circles (among the best)

Claims: Five Power Circles (among the best)

Overall Customer Satisfaction: Five Power Circles (among the best)

These companies scored 6.5% than PEMCO in the 2015 Northwest Region study (from highest scoring company to lowest scoring company): USAA.

These companies scored .7% or more lower than PEMCO in the 2015 Northwest Region study (from highest scoring company to lowest scoring company): State Farm, Farmers, GEICO, Hartford, American Family, Allstate, Safeco, Progressive, Nationwide, and Liberty Mutual.

2014 Northwest Study

PEMCO Insurance scored higher than all the other companies (except USAA, which scored much better than PEMCO, but has restricted membership to the military & honorably discharged veterans) in this region, and 2% higher than the next highest scoring company, Hartford Insurance.

PEMCO received the highest rating of five power circles (among the best) for auto insurance customer satisfaction, scoring 854 points out of 1,000 points, which is 42 points higher (4.2%) than the Northwest regional average score of 812 points on the 1,000 point scale. PEMCO scored higher than all companies (except USAA) in the regional study (including another smaller company in the Northwest, Mutual of Enumclaw), but much higher than these companies, scoring below the regional study average: Safeco, GEICO, Nationwide, Farmers, Progressive, Allstate, & Liberty Mutual. PEMCO improved a lot over its 2013 score, by 20 points (2%), but customer satisfaction scores for all auto insurance companies were up quite a bit from 2013.

The only category where PEMCO received less than the highest rating was for claims, rated at 4 power circles (better than most). Mutual of Enumclaw scored 26 points (2.6%) below PEMCO, but received a five power circle rating (among the best) for claims. In the category of pricing, The Hartford, like PEMCO, also received a rating of five power circles, so insurance shoppers should check PEMCO’s auto insurance rates against The Hartford, to see which company has the better price for the same coverage.

2013 Northwest Study

As in 2014, PEMCO Insurance scored higher than all the other companies (except USAA, which still scored much better than PEMCO, but as mentioned above, has restricted membership to the military & honorably discharged veterans) in this region, and 1.4% higher than the next highest scoring company, Hartford Insurance.

PEMCO received the highest rating of five power circles (among the best) for auto insurance customer satisfaction in 2013, scoring 834 points out of 1,000 points, which is 42 points higher (4.2%) than the 2013 Northwest regional average score of 792 points on the 1,000 point scale. As in 2014, PEMCO scored higher than all companies (except USAA) in the regional study, but much higher than the followng companies, scoring below the regional study average: Progressive, Liberty Mutual, Allstate, GEICO, Nationwide, Safeco & Farmers. As in 2014, State Farm & American Family scored above average, but several percentage points below PEMCO.

Bottom line: If you are not eligible for USAA, none of the major companies in the Northwest region provide as high a level of overall auto insurance customer satisfaction as PEMCO, according to JD Power.

Source: JD Power Insurance Ratings

PEMCO Insurance Complaint Statistics & Ratings

I analyze the most recent three-year complaint records for PEMCO in the next two sections for auto insurance complaints and for home (homeowners, condo, renters) insurance complaints. I also look at the growth or reduction in annual premium for each product line, as a possible indication of low or high auto or home insurance pricing.

The most frequent reasons for people to file auto & home insurance complaints with a state insurance department against insurance companies, are for claim-related issues, such as delays in a claim payment, unsatisfactory payment of a claim, or denial of a claim. The complaint statistics used in this PEMCO Insurance review are the number of upheld complaints filed against PEMCO with a state’s insurance regulatory authority (usually either the state of Oregon or Washington, since these are the states where PEMCO sells insurance), adjusted for its home or auto insurance market share, as determined by the National Association of Insurance Commissioners. This PEMCO Insurance review provides valuable complaint information to help you decide if PEMCO is the right insurance company for you. By choosing an insurance company with a better-than-average complaint history, or at least avoiding companies with consistent, worse-than-average complaint records, you decrease the likelihood you will have a poor experience, when you need your auto or home insurance company the most.

Source: Home & auto insurance complaint ratios & annual written premiums obtained from the National Association of Insurance Commissioners website

3. PEMCO Auto Insurance Complaint Statistics & Ratings

Here’s how I establish my auto 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.

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

Some insurance companies have multiple subsidiary companies selling auto insurance. PEMCO has only one:

PEMCO Mutual Insurance Company Auto Insurance Complaint Statistics & Ratings

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

2013 Auto Insurance Complaint Ratio = B (.09)

2013 US auto insurance premium = $247,850,351

2012 Auto Insurance Complaint Ratio = B (.08)

2012 US auto insurance premium = $231,603,530

2011 Auto Insurance Complaint Ratio = B (.08)

2011 US auto insurance premium = $227,136,600

PEMCO Mutual Insurance Company, available in Oregon & Washington only, has an excellent auto insurance complaint history over the last three years, much lower than average, with its number of auto insurance complaints, in its worst year during this period, at only 9% of the industry average. The auto insurance market share for PEMCO Mutual Insurance Company has increased each year since 2011, which may indicate competitive pricing for its auto insurance in Oregon or Washington.

4. PEMCO Home Insurance (Homeowners, Condo, Renters) Complaint Statistics & Ratings

Here’s how I establish my home 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.

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

PEMCO, like with its auto insurance, has only one subsidiary company selling home insurance (homeowners, condominium, or renters insurance), called PEMCO Mutual Insurance Company.

PEMCO Mutual Insurance Company Home 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 = $88,326,457

2012 Home Insurance Complaint Ratio = B (0) No complaints

2012 US home insurance premium = $81,951,438

2011 Home Insurance Complaint Ratio = B (0) No complaints

2011 US home insurance premium = $79,790,880

PEMCO Mutual Insurance has a perfect complaint record over the last three years, with no home insurance complaints in 2011, 2012, or 2013. The home insurance market share for PEMCO Mutual Insurance Company has increased each year since 2011, which may indicate competitive pricing for its homeowners insurance in Oregon or Washington.

5. PEMCO Insurance Company Complaints compared to the Complaint Records of Allstate, State Farm, GEICO, & Progressive Insurance.

For both personal auto insurance & home (including homeowners, condo, & renters) insurance, PEMCO Mutual Insurance Company has a superior three year auto & home insurance complaint histories than Allstate, GEICO, Progressive and State Farm. I don’t think any of the insurance companies I have reviewed (see my home page) have complaint ratios as low as PEMCO.

6. PEMCO Insurance Review Summary

Based on its auto & home insurance complaint records, and its top ratings in the 2013 & 2014 JD Power auto insurance customer satisfaction studies, PEMCO provides excellent claims & customer service. However, excellent service is not more important than getting the coverage you need, or may not be worth paying a lot more for your coverage.

When it comes to auto insurance, although coverage and optional coverage options can vary among companies, these variations usually do not result in expensive coverage gaps. For example, one company may offer replacement cost under limited conditions, instead of an actual cash value claims settlement, but the more generous settlement option applies only under specific conditions, and does not matter at all unless you have a claim, or your vehicle is determined to be a total loss. Many options, like a vanishing deductible, claims-free cash back, or accident forgiveness are not worth paying more, as I explain here. PEMCO does not seem to offer non-essential coverage options like these, sometimes offered by other auto insurance companies, but if PEMCO has better rates for you, it’s likely to save you more money in the long run through a lower price.

However, you want to purchase the auto insurance coverage you need, to avoid having large out-of-pocket expenses which may bankrupt you. PEMCO allows you to choose amounts of coverage, including the ability to buy an excess liability (umbrella) policy, to protect you from insufficient liability coverage, like most preferred risk insurance companies. Although some auto insurance coverage options, or coverage differences among the auto insurance policies, offered by various insurance companies are not significant, sometimes they are. For example, the wording in some companies’ auto insurance policies limits coverage for non-residents or non-relatives driving your car. This is why it is wise to have your coverage and policies reviewed by competing agents representing different companies, to help you make sure you have the coverage you need for your situation. For example, if your boyfriend or girlfriend drives your car, you want to make sure they don’t have much less coverage than when you are driving the car.

If you decide PEMCO auto insurance coverage meets your needs, you want to make sure you are not paying a lot more for it, if you can get the same coverage from another company for a better price. PEMCO’s great complaint record and JD Power rating may be worth paying more, but not a lot more. Companies like USAA and Amica also have reputations for great service, and may have a better rate for you. State Farm and Hartford may not look as good as PEMCO’s JD Power study scores, but they come close, and State Farm also has a good three year auto & home insurance complaint history. However, if lower rated companies, such as Farmers, Progressive, or GEICO, have a much better rate for you, you should consider if the lower price is worth the chance of unacceptable claims or customer service.

For home insurance, the different coverage options among companies can be very important. Make sure PEMCO’s home insurance coverage meets your needs before you choose it. If you can get superior coverage from another company at an affordable price, it may be a better choice for you. Many auto & home owners make the mistake of never shopping with other auto & home insurance companies. If you contact enough companies, you’ll find many insurance companies charge a lot more than other companies for the same coverage, or some companies offer much better coverage for the same price. No insurance company has low rates for everyone, so you have to shop with all the leading companies, to find the company with the best coverage and best price for you. 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, & start shopping now!

What do you know about PEMCO auto, home or boat insurance? Did you find this PEMCO Insurance review useful to you? Comment or ask me questions on my facebook page. Follow me on Twitter for important insurance consumer news & new blog entries at CarInsWatch.