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Customer satisfaction with car insurance companies declines
By Insure.com staff

Customers are less satisfied with their car insurance companies this year than they were in 2012, according to the J.D. Power "2013 U.S. Auto Insurance Study."

Still, overall customer satisfaction remains relatively high compared to other years.

The study measures customer satisfaction across five factors -- interaction with insurers, price, policy offerings, billing and payment, and claims. On a 1,000-point scale, overall satisfaction is 794, down 10 points from 2012, yet still achieving the second-highest level since J.D. Power launched the study in 2000.

Scores across all five factors fell year over year, with price and policy offerings both declining by 13 points -- the two factors most contributing to lower overall satisfaction.

"In 2013, there is a sharp rise in the number of customers who have experienced premium increases," Jeremy Bowler, J.D. Power's senior director of the global insurance practice, said in a press statement. "The dollar amount of those increases is also larger, averaging $153 in 2013, compared with an average rate increase of $113 reported in the 2012 study."

The size of the premium increase affects the proportion of affected customers who switch insurers. While only 9 percent of customers who experienced an annual rate increase of $50 or less switched insurers, the switching rate almost doubles to 18 percent when the increase is between $51 and $100, and to 32 percent when the increase is more than $200.
However, customers are more tolerant of rate hikes when insurers notify them in advance and discuss options with them. Satisfaction among these customers average 698, 67 points higher than among customers whose insurers did not discuss a rate increase prior to policy renewal.

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