Consumers are more satisfied with their auto insurance claims experience, primarily as a result of their perceptions of the fairness of settlement terms, according to the “2012 U.S. Auto Claims Satisfaction Study,” from J.D. Power and Associates.
Auto-Owners Insurance ranked highest in overall satisfaction, for the fifth consecutive year, scoring 887 on the 1,000-point scale; next were Amica Mutual and Erie Insurance, which tied at 876 points; and Automobile Club of Southern California (AAA) and COUNTRY, which tied at 874 points.
"As used-vehicle sale prices increase, the value of the loss settlement also increases," said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. "According to our Power Information Network, a database of vehicle sales transactions, used-vehicle sales prices peaked in May and June of this year, averaging nearly $18,500, compared with approximately $17,700 in January of this year."
The study measures satisfaction with the claims experience for auto physical damage loss, including first notice of loss, service interaction, appraisal, repair process, rental experience and settlement.
Overall satisfaction increased to 852 index points, a six-point improvement from 2011. According to survey results, satisfaction has increased in five of the six factors year over year, with settlement, the most important factor contributing to overall satisfaction, increasing by nine points to 846. Among claimants with a total loss, settlement satisfaction increased by 16 points. Compared with last year’s results, the average total-loss settlement increased by nearly $690, driven by higher used-vehicle values.
"Providing exceptional customer service is an important element in driving the perception of being treated fairly," Bowler said. "Claimants' perception of fairness is more than just the amount of the settlement, especially for repairable vehicles, where claimants are more focused on their vehicle being returned in its pre-accident condition. Focusing on keeping claimants updated and quickly communicating what will be covered in the claim also have a major impact on their perceptions of how fairly they are treated."
While settlement satisfaction improved, claimants are spending more on out-of-pocket costs, such as deductibles, rental cars or repair costs, which increased by $26 to $403 compared with last year.
2012 Customer Satisfaction Index Ranking
Auto Owners 887
Auto. Club of So. Ca. 874
American Family 869
The Hartford 868
State Farm 868
AAA NCNU 852
Industry Average 852
The Hanover 843
Liberty Mutual 842
21st Century 821
NJM Insurance Co. 896*
According to the study, settlement satisfaction relies on the perceptions of the fairness of the settlement, which is an indication insurers are managing expectations more effectively, as satisfaction has increased despite the increase in costs incurred by claimants, the study says.
Insurers are offering more options to customers to keep them informed about the progress of their claim. This year, 64 percent of claimants said they had been offered options, compared with 61 percent last year. Failure to explain and update claimants may lead to them questioning the settlement and increasing the rate of negotiations, which negatively impacts overall satisfaction, the study said.
The “2012 U.S. Auto Claims Satisfaction Study” was based on responses from more than 12,508 auto insurance customers who settled a claim within the past six months. The study excludes claimants whose vehicle only incurred glass/windshield damage or was stolen, or who only filed roadside assistance claims.
* New Jersey Manufacturers Insurance is open only to NJ Business & Industry Association members.
** USAA is open only to U.S. military personnel and their families
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