Auto Insurance Satisfaction at an All-Time High

While it may come as surprise to some, J.D. Power and Associates' 2012 Auto Insurance Study shows that overall customer satisfaction with car insurance companies has reached an all-time high.

The study measured five different factors, including interaction, price, policy offerings, practices, and billing and pricing. Judged on a 1,000-point scale, overall satisfaction among all auto insurance companies rose to 804, up 14 points from last year. The most improved single category was policy offerings, which was up 30 points, while interaction received a 14-point bump.

J.D. Power and Associates have noted that the significant increase in ratings for policy offerings comes from major insurance companies trying to place on emphasis on product differentiation through advertising and unique discount offerings and packages.

The study also showed that 20% of customers experienced an insurer-initiated rate from 2011 to 2012. Even more surprising was that fact that those who experienced only a modest increase in price were extremely tolerant, given they felt the insurer lived up to their service expectations. Among customers whose rates increased by $50 or less, the overall satisfaction rate was 797, versus a rating of 735 for those who experienced an increase of $50 or more.

Insurance providers who proactively communicated with customers regarding rate increase prior to the renewal notice, while also engaging customers in discussions regarding their insurance options, were much more likely to keep satisfaction high, not to mention retain customers. Satisfaction among customers who were notified prior to a rate increase and had a discussion with their insurer was 807. The rating from those who were not notified was only 746.

One of the latest and most unique changes in the satisfaction landscape was the prevalence of consumers who took to various forms of social media to air frustrations regarding their auto policies. Research conducted by J.D. Power's Consumer Insight and Strategy Group found that a significant number of social medial comments were regarding auto insurance rate increases. Of those comments, most indicated a desire to switch providers, or at least start shopping for quotes. Most comments also asked peers if they had similar increases, or for recommendations for another insurer.

When the Consumer Insight and Strategy Group looked into those customers who began the shopping process due to a rate increase, it found that most did not switch. However, if the customer felt like they were driven to shop because they were dissatisfied with their services, three of four eventually switched providers.

The study also measured satisfaction within seven regions of the U.S. The Southeast had the highest overall satisfaction score of 814, while the Northeast had the lowest overall rating of 784. You can view the full J.D. Power and Associates report, with details on the highest rated insurance companies by region, here.

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