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Auto-Owners gets top score for car insurance claims service

car total lossAll auto accidents are stressful, but those that result in the total loss of your vehicle can be especially distressing.

We all learn how dependent we are on cars when we temporarily lose our set of wheels. This is a time when your auto insurance company can make your life easier or simply add to your anxiety. A recent study found that carriers can deliver a satisfying experience if they address a few key needs during the claims process. Unfortunately, not all insurers were found to be meeting those needs.

The J.D. Power and Associates 2011 Auto Claims Satisfaction Study found that claimants who suffer a total loss are notably less satisfied with the claims process when compared to customers who have a vehicle that can be repaired. The lower ratings stem from a lack of communication and dissatisfaction with the settlement offer. Fifty percent of total loss claimants reported that they believed their settlement was not high enough to replace their vehicle with a similar make and model.

J.D. Power and Associates 2011 U.S. Auto Claims Satisfaction Study
Company Score (out of 1,000) J.D. Power rating (up to 5)
Auto-Owners 890 5
State Farm 878 4
Amica Mutual 865 4
American Family 862 4
The Hartford 858 4
COUNTRY 853 3
Erie Insurance 851 3
Travelers 848 3
Industry Average 846 3
Nationwide 841 3
GEICO 840 3
California State Automobile Assoc. 839 3
Safeco 838 3
Progressive 836 3
The Hanover 835 3
Allstate 834 3
Liberty Mutual 830 3
Mercury 825 3
Automobile Club of Southern California 824 3
MetLife 824 3
Automobile Club Group 821 2
Farmers 804 2
Esurance 800 2
Encompass 789 2
Commerce 772 2
21st Century 771 2
Also:

*USAA 889 5
**New Jersey Manufacturers Insurance 885 5
*USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.
**New Jersey Manufacturers Insurance Co. also has limited membership.

The percentage of car insurance claims declared a total loss decreased slightly in 2010 to around 14 percent, according the CCC Information Services Inc. 2011 Crash Course report. The average value of these vehicles was around $7,500, up slightly from 2010. While the number of declared total loss vehicles is dropping, dissatisfaction with the car insurance claims process is up.

What car insurance customers appreciate

J.D. Power found that total-loss consumers highly value three traits when it comes to a satisfying claims experience:

  • Communication -- Claimants appreciate clear and frequent communication from their insurer. Nearly 40 percent of claimants mentioned this in the study. "We advise insurers to communicate early and often, starting at first notice by clearly explaining how a claim is processed and setting a realistic expectation and time frame,” says Jeremy Bowler, senior director of the insurance practice at J.D. Power. “When dealing with total loss claimants, how an adjuster presents the settlement is critical.”
  • Speed -- A total loss claim is a major pain for the insured. Claimants appreciate a speedy settlement. The report found that on average a total loss claim takes 18.2 days to settle while a repair claim is concluded in 12.5 days. Insurers that speed up the process did better in the rankings. "On average we will have a settlement figure within four to five business days of first notice of loss, says Amica's Jim Will, senior assistant vice president of claims.
  • Fairness -- Claimants value being treated fairly and getting a thorough explanation of the settlement amount. According to Bowler, settlement satisfaction accounts for 37 percent of customers' overall experience rating.

Who's doing it right?

The report found that half of total loss claimants felt their settlement offer was unfair. Nearly one in five claimants rejected their original settlement offer and managed to negotiate a higher amount 80 percent of the time.

If you are an Auto-Owners Insurance customer, however, the process is less likely to be contentious, according to the survey.

Auto-Owners came out on top among insurance companies for the fourth year running (see chart below). Auto-Owners ranked high in all six factors that were measured. According to Bowler, “Auto-Owners Insurance sets the benchmark for ensuring a claimant feels at ease with the process” mainly by explaining the claim process at first notice.

Amica claimants also have reason to feel optimistic. Amica was the only insurer that managed to eliminate the satisfaction gap between claimants whose cars were declared a total loss and claimants whose cars were repairable. The company did this by performing particularly well on the factors that measured communication satisfaction, such as returning phone calls and providing timely status updates.

"Listening is key to customer satisfaction,” says Will. “We listen carefully to claimants about the condition of their vehicle and any added value options they may have installed so we can come up with the fairest settlement for everyone involved."

Total loss insurance tips 

Bowler advises claimants to "examine the settlement offer and, in particular, verify the vehicle content and condition.” Customers who disputed their vehicle's valuation most often cited differences concerning comparable vehicles (56 percent), vehicle condition (53 percent) and aftermarket accessories (18 percent).

The report offers a few additional tips:

  • Request a printed report that details your insurance settlement offer. Confirm vehicle specifications and upgrades as well as aftermarket accessories. Verify and agree on the vehicle condition.
  • Verify that the comparable vehicles used in the settlement valuation truly are comparable to the condition and trim level of your vehicle.
  • Ask the adjuster to examine your vehicle in person if you disagree with the settlement offer.

 

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