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Customer satisfaction with auto insurance claims declines
The satisfaction level of motorists who had to make a car insurance claim dipped slightly compared to last year, but the overall industry kept most of the gains it made since 2008, according to a study by J.D. Power and Associates.
Out of roughly 12,000 people who responded to the study, one age group stands out. Members of Generation Y, those born between 1977 and 1994, have different expectations when it comes to insurance compared to, say, baby boomers. The study found that Generation Y consumers are the least satisfied generational group when it comes to buying auto insurance, service and claims handling – and they are proving to be the most difficult group to insure.
In order to retain younger drivers, t
he study suggests that insurance companies must learn to better communicate about the claims process. Generation Y customers represent a lucrative consumer segment, soon to become the largest in the United States, according to the study.
The study also found several trends for Generation Y car insurance claimants. They were often making their first claim, took longer to file it and had more questions afterward. Many didn't own a second vehicle and didn't know if their insurance policy provided for rental car coverage.
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Generation Y and its satisfaction level with car insurance companies was only one part of the study. Overall, consumer satisfaction with car insurers was 837 on a scale of 1,000, a slight decline from the 842 registered in 2009.
While that number dropped, it's still 2.3 percent higher than the 818 rating in 2008 and 3.5 percent over the 809 in 2007 (the first year J.D. Power conducted the study).
The slight decline in the 2010 score was because of a decrease in number of claimants who considered their car insurance settlement to be fair and equitable, according to J.D. Power and Associates.
“In 2009, the industry experienced dramatic improvements in overall claims satisfaction, fueled in part by a two-day reduction in average repair time year over year,” says Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates.
Mark Garrett, J.D. Power and Associates research manager, adds that the average repair cycle -- from when a claimant's first report of loss to when they get their vehicle back -- was 12.7 days in the 2010 study.
In the 2009 study, the average time was just 12.6 days compared to 14.8 days in 2008, Garrett says.
One factor in the decrease in the repair time cycle is people are driving less and therefore less crashes occur, Garrett says. With that, repair shops have less backups and can perform repairs quicker.
Six factors were considered: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement.
Auto-Owners Insurance ranked highest among car insurance companies for a third year in a row with a score of 902. Amica Mutual and The Hartford ranked second, tying for 872 points each.
Rounding out the bottom three were Mercury, Commerce and 21st Century, with scores of 807, 783 and 781, respectively.
"One thing that sets (Auto-Owners Insurance) apart is the way they use their agents in the claim. They put their agent front and center in the process. Customers definitely respond well to that," Garrett adds. "With the agent, you get this perception of having a trusted advisor guiding you through the process.”
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