A new J.D. Power survey of U.S. car owners tackles the topic of customer satisfaction and trust when it comes to insurance companies. According to the latest J.D. Power 2024 U.S. Auto Insurance Study, despite insurance premium rate increases in the U.S. being up by 11.2 percent on average in the past year, customers who express a high level of trust in their insurers also say they’re satisfied with them.
But, those folks are in the minority: Power also notes that half (51 percent) of drivers surveyed say they have little trust in their auto insurers, while just 15 percent have high levels of trust and 34 percent have mid levels of trust.
What does “trust” in this context mean? The study doesn’t amplify on the definitions, except to say, vaguely, that it’s about companies “who come through when they are needed.” We’d suggest honesty and fairness in dealing with claims are key elements, and Power says that in these days of skyrocketing premiums, it’s also about customers who “manage expectations … who fully understand the reasons for that increase and expect the increase.”
“Auto insurers are in a tough position right now,” said Breanne Armstrong, director of global insurance intelligence at J.D. Power. “With repair costs still rising — and with more than 20 percent of vehicles involved in collisions now considered total write-offs — insurers are still losing money, despite passing along huge price increases to their customers.”
The findings indicate that trust varies by region: The lowest trust scores are in regions with the largest proportion of insurer rate increases. Florida, where the incidence of rate increases is highest, also has the highest percentage of customers (55 percent) with low levels of trust.
The average overall satisfaction score among auto insurance customers with the highest level of trust in their insurer is 917 (on a 1,000-point scale), which is 426 points higher than among those who have the lowest level of trust in their insurer. But again, that level of trust exists in a small minority of customers.
The U.S. Auto Insurance Study, now in its 25th year, was redesigned for 2024. It measures customer satisfaction with auto insurers in seven categories: level of trust; price for coverage; people; ease of doing business; product/coverage offerings; problem resolution; and digital channels.
The study looked at 11 geographic regions. These are the insurance companies with the highest cumulative satisfaction scores in each of those regions:
California: Auto Club of Southern CA (AAA) (684)
Central: Shelter (677) (for a fourth consecutive year)
Florida: Auto-Owners Insurance (654)
Mid-Atlantic: Erie Insurance (713) (for a third consecutive year)
New England: Amica (709)
New York: Travelers (667)
North Central: Erie Insurance (710) (for a fourth consecutive year)
Northwest: PEMCO Insurance (666)
Southeast: Alfa Insurance (693)
Southwest: CSAA Insurance Group (AAA) (683)
Texas: Texas Farm Bureau (686)
A separate category rated satisfaction among customers of “usage-based insurance” nationwide, aka “pay as you drive” insurance. That score was distinctly higher, at 842.
This year’s study is based on responses from 41,242 customers and was collected from August 2023 through April 2024.
There are detailed rankings for the 12 surveyed categories/regions here.
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