A recent survey conducted by J.D. Power among U.S. car owners delves into the subject of customer satisfaction and confidence in insurance companies. According to the latest J.D. Power 2024 U.S. Auto Insurance Study, despite a significant 11.2 percent average increase in insurance premium rates in the U.S. over the past year, customers who demonstrate a high level of trust in their insurers also report satisfaction with their services.
However, these satisfied customers are in the minority. The study reveals that half (51 percent) of surveyed drivers admit to having little trust in their auto insurance providers, while only 15 percent express high levels of trust, with another 34 percent falling in the moderate trust category.
What does “trust” entail in this context? While the study does not elaborate on specific definitions, it vaguely mentions that trust is related to companies that “come through when they are needed.” Factors such as honesty and fairness in handling claims are likely crucial elements. Additionally, in the current environment of rising premiums, trust also involves customers who “manage expectations” by understanding and expecting rate increases.
Breanne Armstrong, director of global insurance intelligence at J.D. Power, acknowledges the challenges faced by auto insurers today. Despite passing on substantial price hikes to customers, insurers are still grappling with rising repair costs and a growing number of total write-offs from collisions.
The study indicates that levels of trust vary by region, with regions experiencing higher insurer rate increases typically showing lower trust scores. For instance, Florida, which has seen a high incidence of rate increases, also has the highest percentage of customers (55 percent) with low levels of trust.
The average overall satisfaction score among auto insurance customers with high trust in their insurer is 917 on a 1,000-point scale, which is significantly higher than the score among those with low trust levels. However, customers with high trust levels remain a minority.
The U.S. Auto Insurance Study, now in its 25th year, has been revamped for 2024. It assesses customer satisfaction with auto insurers across various categories, including trust level, price for coverage, customer service, ease of transactions, product offerings, issue resolution, and digital platforms.
The study covers 11 geographic regions and identifies the insurance companies with the highest cumulative satisfaction scores in each region:
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 in the study evaluates satisfaction among customers of “usage-based insurance” nationwide, also known as “pay as you drive” insurance, which scored notably higher at 842.
This year’s study is based on feedback from 41,242 customers collected between August 2023 and April 2024.
For detailed rankings in the 12 surveyed categories/regions, click here.
FAQ
What factors contribute to high levels of trust in auto insurers?
High levels of trust in auto insurers are typically associated with honesty, fairness in claims handling, and effectively managing customer expectations, especially in the face of rising premiums.
Conclusion
The J.D. Power 2024 U.S. Auto Insurance Study underscores the importance of trust in insurance relationships, with high levels of trust correlating with increased customer satisfaction. Despite challenges such as soaring repair costs and premium hikes, insurers need to prioritize transparency, fairness, and effective communication with customers to build and maintain trust.
