What Is an NAIC Number?

Many people have concerns about certain insurance companies and their trustworthiness. The NAIC code helps consumers learn more about potential insurers to determine whether they are worth investing in. Nobody wants to waste time or money on auto insurance coverage that doesn’t live up to expectations.

Thankfully, the National Association of Insurance Commissioners (NAIC) provides insurance companies with an NAIC code. This unique identifier helps identify how strong a company is, what type of complaints have been levied against them, and which products they sell most.

You’ll have everything you need to know about an NAIC code in a matter of minutes. Until then, enter your ZIP code and get free quotes from leading insurance companies in just a few clicks.

What Is an NAIC Number?

An NAIC number, or NAIC code, is a five-digit number that serves as a unique identifier for insurance companies in the United States. In some cases, the NAIC code is referred to as an NAIC Company Identification Number (CIN).

By using the NAIC complaint code, you can find a variety of important details, such as a company’s financial information, licensure, and complaints. Depending on the insurance company, this could be good or bad for the company.

What Is the Purpose of an NAIC Number?

The purpose of an NAIC number is to identify each insurance company, the products they sell, which products they sell most, and any common customer complaints. In a sense, a company’s NAIC code is designed to reassure consumers before they buy an insurance policy.

Once you identify a company’s NAIC code, you can search for different information on that company to get more detailed transcripts. You have five options, which include:

• Results by complaint code
• Results by complaint index
• Results by state
• Results by licensing
• Results by financial

Not all complaints or licenses will be relevant to you, the prospective policy holder. If you have doubts about an insurance company’s legitimacy, you can confirm its licensure for various products in each state.

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NAIC Results by Complaint Code

Once you’ve performed an NAIC number lookup and have identified the appropriate code for a company, you can investigate that company’s metrics and licensure details. The first option deals with complaints about the company and is organized into different categories based on the insurer’s policy options.

For example, when reviewing State Farm’s NAIC complaints, you’ll find that the greatest volume of complaints comes from its auto liability insurance policies.

By using this search tool, you can see that State Farm has many more complaints about its auto insurance (804) than its homeowner’s insurance (11). You can even reorganize the complaints to learn more about why customers filed a complaint.

NAIC Results by Complaint Index

The NAIC Complaint Index is a quick and effective tool that consumers can use to see how frequently customers file complaints on an insurance company. This is based on complaints by volume to make things fairer between large and small insurance companies.

Once you have the NAIC code for an insurance company, you can identify its complaint index. In short, this index is a scale that starts at zero and increases based on the number of complaints a company has. An index of zero would indicate that the company has had zero complaints, which is uncommon.

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An index of one is an average number of complaints. Any index value below one means the company has very few complaints whereas a value above one indicates the company fields more complaints than similar competitors.

For example, Allstate has a complaint index of 2.71. This score indicates that Allstate has almost three times as many complaints as other insurance providers. This would be a concern. As a prospective policyholder, you might want to go back to the results by complaint code to determine whether or not those complaints would affect you.

NAIC Results by State

Most insurance companies specialize in certain products and many of those a localized to specific regions within the country. Using the NAIC results by state, you can figure out whether or not an insurer has consistent problems in your state.

It’s worth noting that you will need the exact company name to get accurate results. Many insurance companies have subsidiaries or affiliates for different products that they sell. Nationwide, for example, is typically listed as Nationwide Mutual Insurance Company, but they also have a Nationwide Mutual Fire Insurance Company subsidiary.

Most of the traditional Nationwide insurance complaints come from California while virtually none stem from the New England region. With the company’s fire insurance products, most of those complaints come from Maryland and Pennsylvania while there are very few complaints in the midwest.

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NAIC Results by Licensing

If you have concerns about whether or not a company is licensed to sell a specific insurance product, this option is your safest bet. It breaks down the licensure status for air, auto, earthquake, flood, and homeowner’s insurance by state.

For example, the NAIC shows that AIG offers all of the aforementioned policy types in most states but not all. If you live in one of the following states, you might not be able to secure an AIG policy legally.

• Alabama
• California
• Massachusetts
• Maine
• Minnesota
• New Jersey
• New York
• Vermont

There are some other policy options, such as life insurance, that may be available in those states. Overall, it might be wise to avoid companies that aren’t licensed for multiple products in your state.

NAIC Results by Financial

The NAIC financial report can be an excellent tool to analyze company growth and revenue. You can get a snapshot of a company’s assets, liabilities, and capital, amongst other things. You can also see a company’s three-year growth in comparison with its complaints over that same span.

For example, Progressive had a net income of about $700 million in 2018 but improved to over $1.3 billion in 2020. That said, Progressive’s complaints also increased from 99 to 125 in that same time.

You can also see that the majority of Progressive’s revenue comes from its liability auto insurance policies. Virtually all of Progressive’s top revenue generators are from auto insurance, whether it be private liability or commercial physical damage.

What are the benefits of having an NAIC number?

Most of the benefits revolving around an NAIC number are for consumers. An NAIC number could be beneficial to an insurer if they consistently perform well and have few customer complaints, but that’s not always the case.

If an insurance company is consistently experiencing growth, it could take advantage of the NAIC number by marketing its successes. Most of the time, an insurance company doesn’t want to mention anything about customer complaints, even if they are infrequent.

Overall, an NAIC code benefits consumers by providing information that many insurance companies would otherwise hide.

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NAIC Numbers: The Bottom Line

What is an NAIC number?

This number is a unique identifier provided to each insurance company that helps consumers determine how well an insurance company is performing, how many complaints it has, and where you can purchase policies from that company.

By now, we hope you’re feeling more well-versed in NAIC numbers. Before you go, enter your ZIP code below to get free quotes from the leading insurance companies in your area with just a few clicks.

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